Annual Financial Report

RNS Number : 2032Z

Murray International Trust PLC

13 March 2017

MURRAY INTERNATIONAL TRUST PLC

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2016

1. STRATEGIC REPORT - COMPANY SUMMARY AND FINANCIAL HIGHLIGHTS

Financial Highlights

Net asset value total return		Share price total return
+40.3%		+50.5%
2015	-7.8%	2015	-15.2%
Benchmark total return		Revenue return per share
+25.8%		51.2p
2015	+2.6%	2015	45.7p
Dividend per share{A}		Net gearing{B}
47.5p		+12.5%
2015	46.5p	2015	+17.4%
{A} Dividends declared for the year in which they were earned.
{B} Net gearing is calculated by dividing total assets (as defined below) less cash or cash equivalents by shareholders' funds expressed as a percentage.

2. STRATEGIC REPORT - OVERVIEW OF STRATEGY

Investment Objective

The aim of the Company is to achieve a total return greater than its benchmark by investing predominantly in equities worldwide. Within this objective, the Manager will seek to increase the Company's revenues in order to maintain an above average dividend yield.

The Company's investment objective and financial highlights are shown in the Strategic Report. A review of the Company's activities is given in the Chairman's Statement and the Investment Management Review on.

The Chairman's Statement and Manager's Review include an analysis of the business of the Company and its principal activities, likely future developments of the business, the recommended dividend and details of any acquisition of its own shares by the Company.

Investment Policy

Asset Allocation

The Company's assets are invested in a diversified portfolio of international equities and fixed income securities spread across a range of industries and economies. The Company's investment policy is flexible and it may, from time to time, hold other securities including (but not limited to) index-linked securities, convertible securities, preference shares, unlisted securities, depositary receipts and other equity-related securities. The Company may invest in derivatives for the purposes of efficient portfolio management. The Company's investment policy does not impose any geographical, sectoral or industrial constraints upon the Manager. The Board has set guidelines which the Manager is required to work within from meeting to meeting. It is the investment policy of the Company to invest no more than 15% of its gross assets in other listed investment companies (including listed investment trusts) at the time of purchase. The Company currently does not have any investments in other investment companies.

Risk Diversification

The Manager actively monitors the Company's portfolio and attempts to mitigate risk primarily through diversification. The Company is permitted to invest up to 15% of its investments by value in any single stock (at the time of purchase).

Gearing

The Board considers that returns to shareholders can be enhanced by the judicious use of borrowing. The Board is responsible for the level of gearing in the Company and reviews the position on a regular basis. Any borrowing, except for short-term liquidity purposes, is used for investment purposes or to fund the purchase of the Company's own shares. Total gearing will not in normal circumstances exceed 30% of net assets with cash deposits netted against the level of borrowings. At the year end, there was net gearing of 12.5% (calculated in accordance with Association of Investment Companies guidance) and particular care is taken to ensure that any bank covenants permit maximum flexibility of investment policy.

Changes to Investment Policy

Any material change to the investment policy will require the approval of the shareholders by way of an ordinary resolution at a general meeting. The Company will promptly issue an announcement to inform the shareholders and the public of any change of its investment policy.

Delivering the Investment Policy

Day-to-day management of the Company's assets has been delegated to the Manager. The Manager invests in a diversified range of international companies in accordance with the investment objective.

The portfolio manager, Bruce Stout, has responsibility for portfolio construction across all regional segments. As can be seen from the business model contained in the Annual Report, the Aberdeen management team utilises a "Global Equity Buy List" which is constructed by each of the specialist country management teams. This list contains all buy (and hold) recommendations for each management team, which are then used by the portfolio manager as the Company's investment universe. Stock selection is the major source of added value.

Top-down investment factors are secondary in the Manager's portfolio construction, with stock diversification rather than formal controls guiding stock and sector weights. Market capitalisation is not a primary concern.

A detailed description of the investment process and risk controls employed by the Manager is disclosed in the Annual Report. A comprehensive analysis of the Company's portfolio is disclosed below including a description of the twenty largest investments, the portfolio of investments by value, attribution analysis, distribution of investments and distribution of equity investments.

In addition to equity exposures, the investment mandate provides the flexibility to invest in fixed income securities. The process of identifying, selecting and monitoring both sovereign and corporate bonds follows exactly the same structure and methodology as that for equity investment, fully utilising the global investment resources of the Manager. As in the case of equity exposure, the total amount, geographical preference, sector bias and specific securities will ultimately depend upon relative valuation and future prospects.

At the year end the Company's portfolio consisted of 48 equity and 24 bond holdings. The Manager is authorised by the Board to hold between 45 and 150 stocks in the portfolio.

Management

The Company's Alternative Investment Fund Manager is Aberdeen Fund Managers Limited ("AFML") which is authorised and regulated by the Financial Conduct Authority Day to day management of the portfolio is delegated to Aberdeen Asset Managers Limited ("AAM"). AAM and AFML are collectively referred to as the "Investment Manager" or the "Manager".

Benchmark

The Company's benchmark is a composite index comprising 40% of the FTSE World UK Index and 60% of the FTSE World ex-UK Index.

Website

murray-intl.co.uk

Key Performance Indicators (KPIs)

The Board uses a number of financial performance measures to assess the Company's success in achieving its objective and determine the progress of the Company in pursuing its investment policy. The main KPIs identified by the Board in relation to the Company which are considered at each Board meeting are as follows:

KPI	Description
Performance	Absolute Performance: The Board considers the Company's NAV total return figures to be the best indicator of performance over time and these are therefore the main indicators of performance used by the Board. Relative Performance: The Board also measures performance against the Benchmark and performance relative to competitor investment trusts over a range of time periods, taking into consideration the differing investment policies and objectives employed by those companies. Share Price Performance: The Board also monitors the price at which the Company's shares trade relative to the Benchmark on a total return basis over time A graph showing absolute, relative and share price performance is shown in the Annual Report.
Discount/Premium to NAV	The discount/premium relative to the NAV per share represented by the share price is closely monitored by the Board. The objective is to avoid large fluctuations in the discount/premium by the use of share buy backs and the issuance of new shares or the sale of Treasury shares, subject to market conditions. A graph showing the share price premium/(discount) relative to the NAV is shown in the Annual Report.
Dividend	The Board's aim is to seek to increase the Company's revenues over time in order to maintain an above average dividend yield. Dividends paid over the past 10 years are set out in the Annual Report.
Gearing	The Board's aim is to ensure that gearing is kept within the Board's guidelines issued to the Manager.

Risk Management

There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial condition, performance and prospects. The Board has undertaken a robust review of the principal risks and uncertainties facing the Company including those that would threaten its business model, future performance, solvency or liquidity. Those principal risks are disclosed in the table below together with a description of the mitigating actions taken by the Board. The principal risks associated with an investment in the Company's shares are published monthly on the Company's factsheet or they can be found in the pre-investment disclosure document ("PIDD") published by the Manager, both of which are available on the Company's website. Potential issues relating to the work of the Audit Committee are discussed in the Report of the Audit Committee in the Annual Report and further detail on financial risks and risk management is disclosed in note 18 to the financial statements.

The Board regularly reviews the risks and uncertainties faced by the Company in the form of a risk matrix and a summary of the principal risks is set out below.

Description	Mitigating Action
Investment strategy and objectives - if the Company's investment objective becomes unattractive and the Company fails to adapt to changes in investor demand, the Company may become unattractive to investors, leading to decreased demand for its shares and a widening discount.	The Board keeps the level of discount and/or premium at which the Company's shares trade as well as the investment objective and policy under review and holds an annual strategy meeting where the Board reviews updates from the Manager, investor relations reports and the Broker reports on the market. In addition, the Board is updated at each Board meeting on the make up of and any movements in the shareholder register and the Directors attend meetings with shareholders.
Investment portfolio, investment management - investing outside of the investment restrictions and guidelines set by the Board could result in poor performance and inability to meet the Company's objectives.	The Board sets, and monitors, its investment restrictions and guidelines, and receives regular Board reports which include performance reporting on the implementation of the investment policy, the investment process and application of the guidelines. The Manager attends all Board meetings. The Board also monitors the Company's share price relative to the NAV.
Financial obligations - the ability of the Company to meet its financial obligations, or increasing the level of gearing, could result in the Company becoming over-geared or unable to take advantage of potential opportunities and result in a loss of value to the Company's shares.	The Board sets a gearing limit and receives regular updates on the actual gearing levels the Company has reached from the Manager together with the assets and liabilities of the Company and reviews these at each Board meeting. In addition, AFML, as alternative investment fund manager in conjunction with the Board, has set an overall leverage limit of 2.0x on a commitment basis (2.5x on a gross notional basis) and includes updates to its reports to the Board.
Financial and Regulatory - the financial risks associated with the portfolio could result in losses to the Company. In addition, failure to comply with relevant regulation (including the Companies Act, the Corporation Taxes Act, the Alternative Investment Fund Managers Directive, Accounting Standards and the FCA's Listing Rules, Disclosure and Prospectus Rules) may have an impact on the Company.	The financial risks associated with the Company include market risk, liquidity risk and credit risk, all of which are mitigated in conjunction with the Manager. Further details of the steps taken to mitigate the financial risks associated with the portfolio are set out in note 18 to the financial statements. The Board relies upon the Aberdeen Group to ensure the Company's compliance with applicable regulations and from time to time employs external advisers to advise on specific concerns.
Operational - the Company is dependent on third parties for the provision of all systems and services (in particular, those of Aberdeen Asset Management) and any control failures and gaps in these systems and services could result in a loss or damage to the Company.	The Board receives reports from the Manager on internal controls and risk management at each Board meeting. It receives assurances from all its significant service providers, as well as back to back assurance from the Manager at least annually. Further details of the internal controls which are in place are set out in the Directors' Report.

Viability Statement

The Company does not have a fixed period strategic plan but the Board formally considers risks and strategy at least annually. The Board considers the Company, with no fixed life, to be a long term investment vehicle but, for the purposes of this viability statement, has decided that a period of five years is an appropriate period over which to report. The Board considers that this period reflects a balance between looking out over a long term horizon and the inherent uncertainties of looking out further than five years.

In assessing the viability of the Company over the review period the Directors have focussed upon the following factors:

- The principal risks detailed in the Strategic Report;

- The ongoing relevance of the Company's investment objective in the current environment;

- The demand for the Company's shares evidenced by the historical level of premium and or discount;

- The level of income generated by the Company;

- The liquidity of the Company's portfolio; and,

- The maturity profile of the Company's £185 million loan facilities which mature between May 2017 and May 2020.

Accordingly, taking into account the Company's current position, the fact that the Company's investments are mostly liquid and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and to meet its liabilities as they fall due for a period of five years from the date of this Report. In making this assessment, the Board has considered that matters such as significant economic or stock market volatility, a substantial reduction in the liquidity of the portfolio or changes in investor sentiment could have an impact on its assessment of the Company's prospects and viability in the future.

Promoting the Company

The Board recognises the importance of communicating the long-term attractions of your Company to prospective investors both for improving liquidity and for enhancing the value and rating of the Company's shares. The Board believes an effective way to achieve this is through subscription to and participation in the promotional programme run by the Aberdeen Group on behalf of a number of investment companies under its management. The Company also supports the Aberdeen Group's investor relations programme which involves regional roadshows, promotional and public relations campaigns. The purpose of these initiatives is both to communicate effectively with existing shareholders and to gain new shareholders with the aim of improving liquidity and enhancing the value and rating of the Company's shares. The Company's financial contribution to the programmes is matched by the Aberdeen Group. The Aberdeen Group Head of Brand reports quarterly to the Board providing an analysis of the promotional activities as well as updates on the shareholder register and any changes in the make up of that register.

Board Diversity

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow the Board to fulfil its obligations. The Board also recognises the benefits, and is supportive, of the principle of diversity in its recruitment of new Board members. At 31 December 2016, there were four male Directors and two female Directors on the Board.

Environmental, Social and Human Rights Issues

The Company has no employees as the Board has delegated day to day management and administrative functions to Aberdeen Fund Managers Limited. There are therefore no disclosures to be made in respect of employees. The Company's socially responsible investment policy is outlined below.

Due to the nature of the Company's business, being a Company that does not offer goods and services to customers, the Board considers that it is not within the scope of the Modern Slavery Act 2015 because it has no turnover. The Company is therefore not required to make a slavery and human trafficking statement.

Socially Responsible Investment Policy

The Company supports the UK's Stewardship Code, and seeks to play its role in delivering good stewardship of the companies in which it invests. While the delivery of stewardship activities has been delegated to the Manager, the Board acknowledges its role in setting the tone for the effective delivery of stewardship on the Company's behalf. Further details on stewardship may be found in the Annual Report.

Global Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from the operations of its business, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.

Kevin Carter

Chairman

10 March 2017

3. CHAIRMAN'S STATEMENT

Performance

I am pleased to report that, during the year to 31 December 2016, the Company's net asset value ("NAV") posted a total return (i.e. with net income reinvested) of 40.3%, a very strong performance when compared with the total return of 25.8% from the Company's benchmark (40% FTSE World UK Index and 60% FTSE World ex UK Index). Over the period, the share price posted a total return of 50.5%, reflecting the move from a discount to a premium to NAV. The most significant influence on the NAV outperformance of the benchmark was the 15% depreciation in the value of trade weighted Sterling over the year. The proximate cause of this was the result of the European Referendum in the UK on 23 June 2016, in the immediate aftermath of which, for example, Sterling depreciated from US $1.49 to US $1.32, a decline of 11%.

The Manager's Review gives further details of the performance outturn, including an attribution analysis which shows the factors affecting NAV performance. After a difficult performance period in the prior three years, the continuing focus on geographical diversification and investment in companies with strong business franchises and shareholder friendly managements was rewarded in the period.

Dividends and Dividend Policy

Three interim dividends of 10.5p per share (2015: three interims of 10.5p) have been declared during the year. Your Board is now recommending a final dividend of 16.0p (2015: 15.0p) which, subject to the approval of shareholders at the Annual General Meeting, will be paid on 16 May 2017 to shareholders on the register on 7 April 2017. If approved, the total Ordinary dividends for the year will amount to 47.5p, an increase of 2.2% from last year (2015: 46.5p). After accounting for the payment of the final dividend, the surplus revenue of approximately £4.85 million will be transferred to the Company's brought forward revenue reserves.

As I have alluded to in previous years, the Company's revenue is substantially derived from overseas companies, which pay dividends in local currencies that are then translated into Sterling upon receipt. The Company's revenue streams are therefore highly susceptible to the strength or weakness of Sterling. The Board and the Manager conducted a study during the year to consider the merits of hedging expected annual revenues arising from the portfolio. The analysis showed that these hedging strategies would add complexity and for certain currencies be very expensive to implement, and therefore concluded that they would be unattractive to deploy.

The inevitable consequence of this is that the annual revenue from the portfolio, when translated into Sterling, will experience volatility caused by Sterling's movements against the currencies of the underlying assets of the Company. These effects can be large as evidenced by the favourable impact of Sterling's decline in 2016. In other years the effect may be in the opposite direction if Sterling generally appreciates. The Board intends to maintain a progressive dividend policy given the Company's investment objective. This means that in some years revenue will be added to reserves, while in others revenue may be taken from reserves to supplement earned revenue for that year, to pay the annual dividend. Shareholders should not be surprised or concerned by either outcome as over time the Company will aim to pay out what the underlying portfolio earns.

Management of Premium and Discount

At the Annual General Meeting held in April 2016, shareholders renewed the annual authorities to issue up to 10% of the Company's issued share capital for cash at a premium and to buy back up to 14.99% of the issued share capital at a discount. During the year, we purchased in the market 1,221,463 Ordinary shares at a discount to NAV for holding in Treasury and we issued 155,625 shares from Treasury at a premium to NAV. The Board will be seeking approval from shareholders to renew both authorities in 2017. As in previous years, both new shares and shares from Treasury will only be issued at a premium to NAV and shares will only be bought back at a discount to NAV. Resolutions to this effect will be proposed at the Annual General Meeting and the Directors strongly encourage shareholders to support these proposals.

During the year the Ordinary shares have traded at an average premium to exclusive of income NAV of 0.4%. The Board continues to believe that it is appropriate to seek to address temporary imbalances of supply and demand for the Company's shares which might otherwise result in a recurring material discount or premium. Subject to existing shareholder permissions (given at the last AGM) and prevailing market conditions over time, the Board intends to continue to buy back shares and issue new shares (or sell shares from Treasury) if shares trade at a persistent significant discount to NAV (excluding income) or premium to NAV (including income). The Board believes that this process is in all shareholders' interests as it seeks to reduce volatility in the premium or discount to underlying NAV whilst also making a small positive contribution to the NAV. At the time of writing, the exclusive of income NAV per share was 1190.8p and the share price was 1180.0p equating to a discount of 0.9% per Ordinary share.

Gearing

At the year end, total borrowings amounted to £185 million, representing net gearing (calculated by dividing the total assets less cash by shareholders' funds) of 12.5% (2015: 17.4%) all of which is now drawn in Sterling. In May 2016, the Company agreed a new £15 million loan facility with The Royal Bank of Scotland plc ("RBS") which was drawn in full on 16 May 2016 and fixed for three years at an all-in rate of 1.467%. The new facility was used to replace a maturing £15 million loan with RBS. At the same time, the Company also repaid from its cash balances the YEN 1.6 billion loan with ING Bank N.V. The Company also has a loan totalling £60 million that is due to mature in May 2017 and the Directors are in the process of reviewing options for the replacement of this facility

Annual General Meeting

This year's Annual General Meeting will be held in Glasgow on 25 April 2017 at 12.30 p.m. at the Glasgow Royal Concert Hall, 2 Sauchiehall Street, Glasgow G2 3NY. As at previous AGMs, there will be a presentation from the Manager and an opportunity to meet the Directors and Manager over lunch. I should be grateful if you would confirm your attendance by completing the separate notice that will accompany the Annual Report, and returning it together with an indication of any particular questions. I hope to see as many shareholders as possible at the AGM in Glasgow.

Final Conversion of B Ordinary Shares

Following receipt of approval from shareholders at the general meetings held in April 2016, all remaining B Ordinary shares in issue on 30 June 2016 were converted into Ordinary shares with effect from 1 July 2016 and there was a bonus issue of one new Ordinary share for every 100 B Ordinary shares held. The final conversion and bonus issue resulted in the issue of 948,124 new Ordinary shares on 1 July 2016. The Board believes that the Company's capital structure is now simpler and more straightforward for both existing and potential shareholders, in addition to which there will also be future cost savings achieved from the exercise.

Directorate

I would like to reiterate the Board's sincere thanks to Lady Balfour of Burleigh, CBE, following her retirement at the AGM held in April 2016. Mrs Alexandra Mackesy joined the Board on 1 May 2016 and we are already benefitting from her extensive experience. Alexandra is a former investment equity research analyst by background and, having spent the majority of her executive career in Asia, she brings significant global perspective to the Board.

Aberdeen

The Board notes the recent announcement of the proposed recommended merger between the Company's Manager, Aberdeen Asset Management PLC, and Standard Life plc. It is still early days in this transaction which is subject to shareholders' and regulatory approvals. The Board has sought and obtained assurances that the existing investment management and client servicing team from Aberdeen will remain in place and focussed on the Company's affairs, and we will be vigilant to ensure this remains the case.

Outlook

It is seldom relevant to focus too intensively on politics when considering the global investment outlook, but the outcomes of the Referendum on 23 June in the UK and the Presidential Election on 8 November in the United States carry serious ramifications that cannot be ignored. Whilst it is premature to draw firm conclusions about the likely consequences, we do know that additional uncertainty will prevail. History teaches us how much financial markets dislike uncertainty. There is an unquantifiable threat to global trade and currency stability, and a potential change in the rules of free-market economics is unlikely to sit comfortably with capital markets.

This environment is likely to produce abnormal shifts in sentiment in markets as investors gather on one or other side of the perceived merits of being exposed to risky assets. This will produce opportunities for patient investors who remain focused on holding a broadly diversified portfolio of companies with robust business models, strong market positions and solid financial disciplines. The Board and the Manager intend to continue with such an approach as the means of delivering the Company's investment objective over time. Even so, 2017 is likely to provide a stern test for financial markets and the delivery of the Company's investment objective.

Kevin Carter

Chairman

10 March 2017

4. MANAGER'S REVIEW

Background

It is said the most valuable currency in the world is trust. Earned through honesty, integrity and truth, where it exists, the possibilities are endless. Inspiring confidence for individuals, business and government, trust allows financial activity to flourish. Without it, there can be no commercial exchange, no international trade, no global investment and no social democracy. In a world increasingly frustrated by unfulfilled promises and austerity fatigue, the single most influential global development over the past twelve months was the dramatic devaluation of trust. As Central Banks, the political elite, academia and the media were seen increasingly to be out of touch with public opinion and detached from the disconnect between policy and reality, respect for them tangibly eroded.

The political cost associated with such widespread trust debasement proved deep and far-reaching. Anti-establishment sentiment escalated on a wave of nationalistic populism, securing power and elected representation seemingly against the odds and often against public opinion. In a global political climate where it became prudent to expect the unexpected, leadership change, policy change and government change swept across the landscape. Credibility loss was most pronounced towards Central Bank policymakers. Four consecutive years of grossly inaccurate economic forecasting condemned the Federal Reserve in the United States to making increasingly hollow-sounding policy predictions. Domestic interest rates were nudged up slightly, but widespread scepticism prevailed. Similar doubt and indecision accompanied policy directives in the UK. The Bank of England's fragile veneer of respectability was shattered following Britain's vote to leave the European Union. Hostage to unsustainable fiscal and current account deficits, the Brexit Referendum result delivered the long expected devaluation of Sterling as international capital took fright. In the ensuing temporary panic, policy discipline was abandoned. Displaying infinitely more consistency in futile policy implementation, the European Central Bank and the Bank of Japan kept on printing banknotes. Creating farce and fallacy whilst simultaneously destroying hard earned savings, such actions were beyond contempt. Yet oblivious to public derision, global Central Bank policymakers ploughed on regardless, in denial of the painfully obvious - issuing more debt to solve a debt crisis simply doesn't work.

Accompanying withering trust in establishment orthodoxy was escalating anxiety over economic performance. The predominant mood of influence early in the period had been one of deflation. Declining global growth forecasts, combined with extreme commodity price weakness, had politicians and policymakers paralysed from persistent macro-economic disappointment. Impotent to influence evolving events, they watched as global bond yields plunged to historic lows. When Germany issued a ten year bond yielding zero in the summer, the monetary vandalism descended to new depths. Such actions proved not just offensively ironic but also the ultimate insult to savers. Widespread condemnation of global economic management intensified and into the economic vacuum flowed the language of change. Based on neither sense nor substance, promises of increased fiscal spending, tax cuts, job creation, higher wages and economic reinvigoration became the lexicon of choice. All talk, no action but disillusioned voters embraced such reflationary rhetoric with great gusto. The half-empty glass became not just half full but somehow positively overflowing! Choosing to ignore systemically entrenched excessive debt, lingering over-capacity, fiscal insolvency, income impoverishment and deficient demand, sentiment soared in anticipation of stronger growth and higher corporate profits in the future. The effects on equity, bond and currency markets were nothing short of remarkable.

Weakness in Sterling against virtually all its major trading partners had significant influence on overall portfolio returns. Apart from staying relatively unchanged against the Mexican Peso, Sterling suffered second half weakness of between -15 to -20% against most portfolio currencies. Against the South African Rand it declined 26% and against the Brazilian Real it lost over 30% of its value. Suffice to say the overall depreciation of Sterling materially enhanced capital and income returns of the Trust.

Latin America provided the strongest regional equity market returns in Sterling terms, up 58.4% over the period. Behind the benchmark strength, Brazil excelled against a backdrop of declining bond yields, interest rate cuts, political resolution and currency strength. The portfolio benefitted significantly from its Brazilian bond and equity exposure, both in terms of income enhancement and capital appreciation. Conversely, sentiment towards Mexico suffered from vitriolic bile associated with Republican campaigning in the United States. Portfolio holdings were not unduly affected but progress was unequivocally constrained. Somewhat surprisingly, North American equity markets surged to record highs despite further declines in corporate profits. Momentum eclipsed fundamentals, particularly during the final six week, post-election rally. Rising protectionism fears and associated weakness in Chinese equities slightly restrained what otherwise proved exceptionally strong returns from Asia ex Japan. Portfolio performance returned +32.1% in Sterling terms from Asian equities, plus healthy double digit total returns from selective Asian bonds. Similarly Japan, although fundamentally deteriorating from ineffective monetary policy and structural economic malaise, kept pace with most global markets. Sterling returns of +41.9% from the Japanese portfolio were well above average. Ongoing political wrangling between the UK and Europe coupled with numerous profit warnings from leading UK and European companies at times haunted the Eurozone backdrop. The UK market clung onto historical highs set towards year end, but conviction investing remained absent from a fragile environment of rising tensions and increased nationalism. Europe's total return of +19.7% proved almost entirely a consequence of Sterling weakness against the Euro. Last, but not least, 2016 provided powerful positive returns from the portfolio's emerging market bond portfolio. A total return of 49.3% in Sterling terms over the period came from a combination of yield compression and currency uplift. More than justifying the relative underperformance "cost" of establishing such exposure over the 2014/15 period, improving domestic fundamentals remain supportive of this asset exposure going forward.

Performance

The NAV total return for the year to 31 December 2016 with net dividends reinvested was +40.3% compared with a return on benchmark of +25.8%. The top five and bottom stock contributors are detailed below:

Top Five Stock Contributors	% ^A	Bottom Five Stock Contributors	% ^A
Taiwan Semiconductor Manufacturing	2.40	Zurich Insurance	-0.17
Daito Trust Construction	1.55	Nordea Bank	-0.11
Sociedad Quimica Y Minera de Chile	1.53	Engie	-0.08
Unilever Indonesia	1.34	Federal Republic of Brazil 10% 01/01/23	-0.06
Banco Bradesco	1.20	Tesco Lotus Retail Growth	-0.05

^A % relates to the percentage contribution to gross NAV return

Attribution Analysis

The attribution analysis below details the various influences on portfolio performance. In summary, of the 8.1% (before expenses) of performance above the benchmark, asset allocation contributed 2.8% and stock selection a further 5.3%. Structural effects, relating to the fixed income portfolio and gearing net of borrowing and hedging costs, added a further 6.4% of relative performance.

	Company		Benchmark		Contribution from:
					Asset	Stock
	Weight	Return	Weight	Return	Allocation	Selection	Total
	%	%	%	%	%	%	%
UK	14.7	37.5	40.0	18.9	1.9	2.3	4.2
Europe ex UK	14.4	24.1	10.0	19.7	-0.9	1.1	0.2
North America	18.4	37.2	37.7	34.1	-1.1	0.3	-0.9
Japan	4.9	41.9	5.7	22.7	0.1	0.8	0.9
Asia Pacific ex Japan	28.9	32.1	5.1	31.7	1.1	-0.1	1.0
Other International	18.7	42.6	1.5	44.0	1.7	1.0	2.6
	______	______	______	______	______	______	______
Gross equity portfolio return	100.0	33.9	100.0	25.8	2.8	5.3	8.1
FX instruments, fixed interest, cash and gearing effect		7.6
		______
Net portfolio return		41.5
Management fees and administrative expenses		-1.2
Tax charge		-0.4
Share issuance effect		0.1
Technical differences		0.4
		______		______
Total Return		40.3		25.75
		______		______

Benchmark is 40% FTSE W UK and 60% FTSE W World ex UK

Notes to Performance Analysis
Asset Allocation effect - measures the impact of over or underweighting each asset category, relative to the benchmark weights.
Stock Selection effect - measures the effect of security selection within each category.
Share Issuance - the enhancement to performance of new shares being issued at premium to NAV.
Technical differences - the impact of different return calculation methods used for NAV and portfolio performance
Source: Aberdeen Asset Management PLC & BNP Paribas Securities Services Limited. Figures may appear not to add up due to rounding.

North America

America's domestic economic landscape continued to polarise opinion. This ranged between those emphasising deflationary risks associated with a chronically over indebted nation and those accentuating potential inflationary pressures inherent with maintaining abnormally low interest rates. Neither side produced sufficient evidence to unequivocally prove their point. The net result was policy inertia. For the marginalised American, desperate for clarity on employment, wages and onerous debt obligations, such policy paralysis proved unwelcome. To fill the void, increasingly radical political promises were made, cumulating in profound changes to government and leadership ideology.

Financial markets, forever eager to embrace exuberance, indiscriminately accentuated perceived positives. The Northern American index rise of +34.1% in Sterling terms over the period reflected a market drunk on sentiment, with its most recent libation imbibed in linguistic form - Make America Great Again.

Exactly why such emotive rhetoric should inspire such unquestioning confidence is unfathomable. Beyond electoral promises, US economic fundamentals dictate a very different reality. The current business expansion arguably shows signs of increasing exhaustion. Seven consecutive quarterly declines in US corporate profits eclipse the unenviable record set in the 1930s, unequivocally illustrating the fatigue in US earnings momentum. Rising bond yields, and more importantly a stronger dollar, would only further compress corporate margins. Clearly Americans want to believe in the revival of animal spirits but declining corporate profits have long been associated with the end of business cycles, not the beginning. The new President inherits an economy that received the largest monetary stimulus in history yet struggled to achieve annualised growth of just 2% over the past seven years. Will four jingoistic words deliver what four trillion dollars of monetary largesse could not?

In rational terms it is reasonable to doubt. The sheer enormity of US debt suggests deflationary risks remain. Unless policymakers are irresponsible enough to impose significant losses on creditors, then the debt overhang remains. Meantime the US Monetary Authorities attempt to set policy within an opaque fiscal landscape full of speculation and supposition. Delivering election promises are likely to be infinitely more difficult than pronouncing them.

Portfolio exposure, focused on defensive above-average yielding businesses, performed well under the circumstances with overall returns exceeding those of the market. All seven North American holdings appreciated over the period, with core telecommunications holdings in Verizon and Telus particularly strong. Profit-taking in consumer staples reduced total exposure to 15.0% by year end.

Economic sceptics maintain that in the purest form of democracy, everyone gets what nobody wants. If rational expectations dictate decision making, then economic choice is enhanced by certainty and stability. The conclusion of yet another turbulent twelve months in UK economic history witnessed almost the exact opposite prevailing. The seismic shock associated with Britain's vote to leave the European Union reverberated around every aspect of domestic activity. For the elected UK Government, Brexit meant Brexit, but for the beleaguered UK economy Brexit meant exactly what? Within the eerie silence that descended, nothing could accurately be assessed about future investment, international trade, immigration, employment, security or growth simply because no precedent existed. Into the vacuum stepped the speculators of doom and gloom, or progress and prosperity depending on which unsubstantiated illusion the respective orator wished to emphasise. Into the vacuum also ventured the Bank of England with perhaps the most inexpedient interest rate cut in living memory. For an economy already burdened with unsustainable current account and budget deficits, excessively leveraged public and private sectors, stagnating real incomes and over-extended property prices such additional uncertainty proved extremely unwelcome. Sterling plunged as the UK's Achilles Heel of foreign capital dependency was cruelly exposed.

For the broader public, and more importantly its diminishing disposable income, currency devaluation quickly translated into higher import costs. Inelastic necessities, such as food and energy, witnessed sharply higher prices which in turn rekindled inflationary concerns and pushed bond yields higher. For businesses, tough decisions on capital allocation between investment and cost containment became infinitely more problematic. Somewhat surprisingly, with the seeds of economic recession being scattered all around, for those disciples of profitless prosperity none of this mattered. The UK equity market maintained its upward momentum with complete disregard to fundamental fragilities. Ignoring growing threats to corporate profitability and dividend cover, by year end the FTSE had surpassed historical highs set sixteen years ago.

Unimpressed by extended valuations against such an opaque economic and political backdrop, UK investment was maintained around historical lows. From a performance perspective, UK portfolio exposure - or more accurately lack of UK exposure - contributed most to relative returns. Superior stock selection in a market that trailed all other regional indices proved very beneficial.

Strong stock selection from holdings in Weir Group, BHP Billiton and Royal Dutch Shell enhanced both absolute and relative performance, with only Vodafone disappointing against expectation. A new position in leading satellite company Inmarsat was initiated, with a long term view towards its involvement in the provision of internet for global airlines.

Strategic Report

Europe

The European Central Bank remained uncomfortably ensnared in its self-made monetary trap throughout 2016. Hostage to policy-obsessed financial markets, policymakers intensified futile monetary attempts to reinvigorate economic activity. Escalating purchases of troublesome sovereign and corporate debts from crippled European banks failed to stimulate activity. Designed to relieve the debt burdens of domestic banks, yet again such practices merely transferred private sector debt obligations onto the public balance sheet. Expecting loan growth to pick up against a backdrop of stubbornly high unemployment, negative real income growth, job insecurity and fragile consumer confidence throughout the region was, at best, naïve if not downright ignorant. The legacy of existing, non-performing loans remains a powerful contractionary force that will haunt Europe for some considerable time to come. Yet still the monetary madness continued, pushing bank deposit rates and bond yields deeper into negative territory. Unrecognisable evolving monetary conditions questioned the very sustainability of banking and insurance businesses in a negative yield, negative deposit rate environment.

Such concerns prompted the outright sales of large portfolio holdings in Nordea Bank in Sweden and Zurich Financial in Switzerland. Manipulative mischief in corporate bond markets and increasingly unreliable guidance over credit quality suggest an increasingly opaque outlook for European financials. Watching from the side-lines how all this unravels seemed the safer and more prudent option.

The widening financial and economic cracks that fractured further during the period arguably paled into insignificance when compared to the emerging political chasm that threatened the very existence of European unity. For without doubt 2016 will go down in history as the year when the European political voice erupted in defiance of European establishment orthodoxy. At its core, unemployment, stagnant growth and broken promises; at its extremities, disillusionment with austerity, distrust of the ruling elite and discredited policies that failed to deliver. In essence a disenfranchised electorate disproportionately enduring the associated deflationary pains. Fuelled by fear and paranoia, nationalist populism thrived.

During the period exposure to European equities was significantly reduced to an historical low of 10.3%, down from 18.2% at year end 2015. Residual exposure remains defensively positioned towards pharmaceuticals and consumer staples companies with an overweight towards Switzerland.

Following on from Brexit, Europe faces an increasingly complex year ahead, fraught with political pitfalls: Elections in Germany, France and Netherlands; Britain's negotiated exit from the EU; Greece's simmering debt crisis and Italy's emerging bank crisis. All need to be resolved, managed and defused against an extremely challenging economic backdrop in which corporate profits and dividends remain under pressure.

Latin America

Ordern e Progresso - Order and Progress. Such scripture circles the globe at the centre of Brazil's iconic green, blue and yellow flag. Without question these are commendable ideals but in practice they have seldom been adhered to. Brazilian economic, political and financial history is littered with periods of the exact opposite, but the most recent chapter, concluding with impeachment of disgraced President Dilma Rouseff, witnessed an end to her accident-prone term in office and offered encouraging signs of relief for one of Latin America's most conflicted nations. Whilst hope followed by disappointment is arguably a particularly Brazilian cycle, recent developments could cautiously be viewed as progress.

Emerging from its deepest recession since the 1980s, the benefits of an extremely internationally competitive exchange rate soon became obvious. An expanding trade surplus attracted significant foreign direct investment inflows, the consequences of which translated into an appreciating currency and declining inflation. Having endured three years of steadily rising interest rates such stability finally provided the platform to begin monetary easing. Against a backdrop of potentially accelerating interest rate cuts and renewed credit-sensitive growth, Brazilian financial markets performed very well. Portfolio exposure to sovereign bonds, corporate bond and equities delivered significant capital and income returns in Sterling terms.

Over the period Brazilian equity exposure returned over +100% in Sterling terms, with Banco Bradesco, Vale and Telefonica de Brasil contributing the most to absolute performance. With corporate profit and dividend upgrades likely to materialise, the current exposure will be maintained.

Conversely, whilst Mexico shares few similarities with Brazil, as an inherently conservative nation, order and progress have essentially been delivered since the dark days of Mexico's own financial crisis over twenty years ago. Recent developments proved no exception, but rising political tensions with the United States severely tested its resolve. Despite rising oil prices, buoyant consumer spending and competitive exports, the country remained suffocated by xenophobic electoral rhetoric in the United States. The Central Bank hiked interest rates five times in defence of a fragile peso which in-enviably became the international barometer of protectionist sentiment. Unfortunately, it may be some time before it discards this unwelcome tag.

Despite decent returns from dollar-denominated Mexican bonds, equity exposure within the portfolio struggled to make progress. Positive absolute returns of +14.1% were recorded but positions in Femsa and Kimberley Clark de Mexico constrained relative performance. Patience will be required, but solid corporate fundamentals support maintaining long term exposure. In aggregate, when including Chilean exposure initiated and built-up over the 2014/15 period, the total return from Latin American portfolio holdings was +44.3% in Sterling terms in 2016. This was further enhanced by maturing Venezuelan sovereign bonds and Brazilian corporate bonds, which contributed significant capital and income gains. Given the possibility of further fundamental improvements and predominately low consensus expectations, selective opportunities will continue to be pursued.

Japan and Asia

The review period witnessed the third anniversary of Japan's unorthodox monetary reflation plan. Introduced to universal enthusiasm and widespread acclaim, the new economic plan had been championed to deliver Japan prosperity from the depths of deflation. Thirty six months later, the economic consequences of an extraordinary monetary experiment which devalued the yen and inflated asset prices make sobering reading. For those more interested in reality, what was high on ambition proved woefully short on substance. Declining real wages, higher sales taxes and more expensive imports condemned the average Japanese person's living standards to fall. Weak economic growth, faltering capital investment and sluggish corporate profitability restrained overall business conditions. Most importantly, outright failure to resolve the Japanese deflationary mentality coupled with negative bond yields dictated for the first time ever, that an aging demographic of Japanese savers watched helplessly as pension promises evaporated. No economic textbook exists that can provide guidance for what comes next.

Against this backdrop, it is never easy constructing an investment case. Finding quality companies in Japan with above 4% yields and sustainable dividend growth is virtually impossible. Corporate Japan has no desire to raise dividends when competing long duration bond yields yield zero! The two companies currently owned have solid, double-digit, five year dividend growth histories, with strong balance sheets to suggest this can continue. But with yields of around 3.0%, the current exposure is primarily there for capital gain. As such, the +41.9% total return in Sterling terms over the period more than achieved its objective. Looking forward, equity exposure can be maintained where bottom up business fundamentals are supportive, but the attractions remained severely limited. Macro-economic paralysis brought about by an aging population, insufficient immigration and constant financial market manipulation will not be alleviated until such times as Japan recognises its flawed policies and practices. Such mea culpa is unlikely to happen anytime soon.

In Asia it might be considered churlish to criticise a regional asset that in aggregate delivered +31.7% in Sterling terms. Against any historical or relative yardstick this proved an exceptionally strong return. What is of interest on closer inspection behind headline numbers are the marked differences in performance which contributed to both total benchmark and total portfolio performance. Better than expected growth, inflation and progress on fiscal reform fed through into currency strength in India and Indonesia allowing for further interest rate cuts and ongoing declines in bond yields. Total equity returns of +17.6% and +40.2% respectively in Sterling terms reflected material differences in starting point valuations despite similar economic progress. Portfolio returns from Indonesian and Indian bond exposures were very strong enhancing both capital and income. No Indian equity exposure due to prevailing high valuations and low dividend yields could be regarded as a missed opportunity, but only what is owned ultimately influences performance.

In this regard the large position in Unilever Indonesia contributed positively. Of materially greater significance were returns from exposures to Taiwan and Thailand. Representing close to 12% of overall assets, solid stock selection produced total returns of 47.5% and 53.8% respectively, adding to both absolute and relative performance. Taiwan Semiconductor and recently initiated Siam Commercial Bank proved standout performers in this respect. Further robust stock returns from Coca Cola Amatil, MTR Corp and Public Bank may not have matched the overall regional benchmark but that is not to criticise. All contributed desired diversification across Australia, Hong Kong and Malaysia respectively and as such positively enhanced the investment objective. Recent additions to Asian asset exposure, which was increased by a further £77.3m over the period, include Auckland Airport in New Zealand and Tesco Lotus Retail in Thailand. Both are relatively small growth companies well positioned to prosper from increasing consumer spending across the Asiatic region. Both emphasise the strategy to invest in different companies in different businesses operating in different countries with different positive growth dynamics. In a global context, numerous such opportunities exist in Asia hence the portfolio's significant exposure there.

Summary of Investment Changes During the Year

	Valuation		Appreciation/		Valuation
	31 December 2016		(depreciation)	Transactions	31 December 2015
	£'000	%	£'000	£'000	£'000	%
Equities
United Kingdom	199,382	12.2	44,048	17,541	137,793	10.7
North America	248,794	15.2	62,138	(31,483)	218,139	17.0
Europe ex UK	167,929	10.3	13,992	(79,581)	233,518	18.2
Japan	66,042	4.1	18,055	-	47,987	3.7
Asia Pacific ex Japan	389,046	23.8	77,345	51,142	260,559	20.3
Latin America	263,412	16.1	80,671	(13,864)	196,605	15.3
Africa	16,422	1.0	3,621	-	12,801	1.0
	_______	_______	_______	_______	_______	_______
	1,351,027	82.7	299,870	(56,245)	1,107,402	86.2
	_______	_______	_______	_______	_______	_______

Fixed income
United Kingdom	7,191	0.4	316	-	6,875	0.5
Asia Pacific ex Japan	79,516	4.9	16,558	10,696	52,262	4.1
Latin America	161,817	9.9	42,378	26,063	93,376	7.3
Africa	19,342	1.2	6,002	134	13,206	1.0
	_______	_______	_______	_______	_______	_______
	267,866	16.4	65,254	36,893	165,719	12.9
	_______	_______	_______	_______	_______	_______
Other net assets	14,136	0.9	2,064	-	12,072	0.9
	_______	_______	_______	_______	_______	_______
Total assets{A}	1,633,029	100.0	367,188	(19,352)	1,285,193	100.0
	_______	_______	_______	_______	_______	_______

{A} The total assets less current liabilities as shown on the Balance Sheet with the addition of Prior Charges.

Outlook

Should future generations ever search for the seminal moment in economic history where so many supposedly intelligent people masquerading as Central Bankers and their financial market cheerleaders descended to the depths of discredited stupidity then 13 July 2016 will be as good as any. For on this day Germany issued a ten year Bund with no coupon. An income investment with no income. To emphasise this particular hideous distortion from numerous others which have polluted financial markets over the past five years is not an attempt to rank its significance. It serves only to highlight just how incredibly far the world has shifted from economic orthodoxy when savers expected, and were entitled to, a return on their savings. The tangled web woven around spiralling debts, insolvent banks, unsustainable deficits, mis-allocated capital and erosion of real wealth exists only to distort and deceive. When such disrespect of real capital value exists, in what can we trust?

Strategic Report

It may appear disconcerting, but is no doubt worth repeating, against such a backdrop of unfamiliar extended valuations and deeply concerning fundamentals, there are no places to hide. The bottom line, of which we are acutely aware, is that both bond and equity markets are very expensive on an absolute and relative basis. Portfolio diversification, through which exposures reflect preferred investment opportunities, does have the benefit of a wide opportunity set. For Murray International, the flexibility to invest anywhere in the world remains a powerful advantage. Trusting in tried and tested methods of stock and bond selection also brings a degree of familiarity to an unfamiliar world. Despite overall valuation concerns, it is still possible to differentiate between whether a business is cheap or expensive, whether it is quality or not. With an emphasis, as ever, on capital preservation and maintaining dividends, diversification remains the strategy of preference, extreme caution the modus operandi.

Bruce Stout

Aberdeen Asset Managers Limited

Senior Investment Manager

10 March 2017

5. EXTRACTS FROM THE DIRECTORS' REPORT

The Directors present their report and the audited financial statements for the year ended 31 December 2016.

Results and Dividends

Details of the Company's results and proposed dividends are shown under Financial Highlights below.

Investment Trust Status

The Company is registered as a public limited company (registered in Scotland No. SC006705) and has been accepted by HM Revenue & Customs as an investment trust subject to the Company continuing to meet the relevant eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for all financial years commencing on or after 1 January 2012. The Directors are of the opinion that the Company has conducted its affairs for the year ended 31 December 2016 so as to enable it to comply with the ongoing requirements for investment trust status.

Individual Savings Accounts

The Company has conducted its affairs so as to satisfy the requirements as a qualifying security for Individual Savings Accounts. The Directors intend that the Company will continue to conduct its affairs in this manner.

Capital Structure

The Company's capital structure is summarised in note 15 to the financial statements. At 31 December 2016, there were 127,484,238 fully paid Ordinary shares of 25p each (2015 - 127,601,952 Ordinary shares) in issue and no B Ordinary shares in issue (2015 - 910,364). At the year end there were 1,065,838 Ordinary shares held in Treasury (2015 - nil).

Share Issuance and Buybacks

During the year 155,625 Ordinary shares were sold from Treasury all at a premium to the prevailing NAV per share (2015 - nil); 28,528 new B Ordinary shares were issued by way of capitalisation issue in lieu of dividends (2015 - 45,352); and, 1,221,463 Ordinary shares were purchased in the market at a discount to NAV for Treasury (2015 - nil).

Final Conversion of B Ordinary Shares

Share Rights

Ordinary shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary shares carry a right to receive dividends and on a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings.

Borrowings

During the year the Company agreed a new £15 million loan facility with The Royal Bank of Scotland ("RBS") which was drawn in full in May 2016 and fixed for three years at an all-in rate of 1.467%. The new facility has been used to repay a maturing £15 million loan with RBS. At the same time the Company repaid its Yen 1.6 billion loan with ING Bank N.V.

Management and Secretarial Arrangements

The Company has appointed Aberdeen Fund Managers Limited ("AFML"), a wholly owned subsidiary of Aberdeen Asset Management PLC, as its alternative investment fund manager under the terms of an investment management agreement dated 14 July 2014. Under the terms of the agreement, the Company's portfolio is managed by Aberdeen by way of a group delegation agreement in place between AFML and Aberdeen. Investment management services are provided to the Company by AFML. Company secretarial, accounting and administrative services have been delegated by AFML to Aberdeen Asset Management PLC.

With effect from 1 January 2016, the Board and the Manager agreed a new basis for calculating the Company's management fees payable to AFML. The performance fee has been discontinued and the annual management fee is now charged on net assets (ie excluding borrowings for investment purposes) averaged over the six previous quarters ("Net Assets"), on a tiered basis. The annual management fee is now charged at 0.575% of Net Assets up to £1,200 million, 0.5% of Net Assets between £1,200 million and £1,400 million, and 0.425% of Net Assets above £1,400 million. Included in the charge of 0.575% above is a secretarial fee of £100,000 per annum which is chargeable 100% to revenue. A fee of 1.5% per annum remains chargeable on the value of any unlisted investments. The investment management fee is chargeable 30% against revenue and 70% against realised capital reserves. No fees are charged in the case of investments managed or advised by the Aberdeen Asset Management Group. The management agreement may now be terminated by either party on the expiry of six month's written notice. On termination the Manager would be entitled to receive fees which would otherwise have been due up to that date. These changes to the management fee arrangements constituted a smaller related party transaction for the purpose of LR 11.1.10 R of the Financial Conduct Authority's Listing Rules.

Prior to 1 January 2016 the management and secretarial fees payable to AFML had been calculated and charged on the basis of 0.5% per annum of the value of total assets, less unlisted investments and all current liabilities excluding monies borrowed to finance the investment objectives of the Company, averaged over the six previous quarters. Included in the charge of 0.5% above there was a secretarial fee of £100,000 per annum and in addition, the Manager was entitled to a performance fee.

The Board considers the continued appointment of the Manager on the terms agreed to be in the interests of the shareholders as a whole because the Aberdeen Asset Management Group has the investment management, secretarial, promotional and administrative skills and expertise required for the effective operation of the Company.

The Board

The Board currently consists of six non-executive Directors. The names and biographies of the current Directors are disclosed in the Annual Report indicating their range of experience as well as length of service. In addition Lady Balfour of Burleigh served as a Director of the Company up to her retirement from the Board on 26 April 2016.

In accordance with the Articles of Association, Mrs Mackesy, having been appointed on 1 May 2016, will retire and offer herself for re-election at the first AGM following her appointment. The other Directors will also retire at the AGM in April 2017 and each Director will stand for re-election. The Board considers that there is a balance of skills and experience within the Board relevant to the leadership and direction of the Company and that all the Directors contribute effectively.

In common with most investment trusts, the Company has no employees. Directors' & Officers' liability insurance cover has been maintained throughout the year at the expense of the Company. The Company's Articles of Association provide an indemnity to the Directors out of the assets of the Company against any liability incurred in defending proceedings or in connection with any application to the Court in which relief is granted.

Management of Conflicts of Interest

No Director has a service contract with the Company although Directors are issued with letters of appointment upon appointment. The Directors' interests in contractual arrangements with the Company are as shown in note 21 to the financial statements. No other Directors had any interest in contracts with the Company during the period or subsequently.

The Board has a procedure in place to deal with a situation where a Director has a conflict of interest, as required by the Companies Act 2006. As part of this process, the Directors are required to disclose other positions held and all other conflict situations that may need to be authorised either in relation to the Director concerned or his or her connected persons. The Board considers each Director's situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the Company and whether the Director's ability to act in accordance with their wider duties is affected. Each Director is required to notify the Company Secretary of any potential or actual conflict situations that will need authorising by the Board. Authorisations given by the Board are reviewed at each Board meeting.

The Company has a policy of conducting its business in an honest and ethical manner. The Company takes a zero tolerance approach to bribery and corruption and has procedures in place that are proportionate to the Company's circumstances to prevent them. The Manager also adopts a group-wide zero tolerance approach and has its own detailed policy and procedures in place to prevent bribery and corruption. Copies of the Manager's anti-bribery and corruption policies are available on its website aberdeen-asset.com.

Substantial Interests

The Board has been advised that the following shareholders owned 3% or more of the issued Ordinary share capital of the Company at 31 December 2016:

Shareholder	No. of Ordinary shares held	% held
Speirs & Jeffrey	9,760,761	7.7
Aberdeen Retail Plans ^A	9,691,638	7.6
Alliance Trust Savings ^A	6,603,253	5.2
Investec Wealth & Management	6,488,653	5.1
Hargreaves Lansdowne ^A	6,202,624	4.9
Charles Stanley	6,187,144	4.8
Rathbones	5,862,834	4.6
Brewin Dolphin	5,598,489	4.4
Smith & Williamson	4,410,867	3.5

^ANon-beneficial interests

There have been no significant changes notified in respect of the above holdings between 31 December 2016 and 10 March 2017.

Corporate Governance

The Company is committed to high standards of corporate governance. The Board is accountable to the Company's shareholders for good governance and, as required by the Listing Rules of the UK Listing Authority, has applied the principles identified in the UK Corporate Governance Code (published in September 2014 and effective for financial years commencing on or after 1 October 2014) for the year ended 31 December 2016. The UK Corporate Governance Codes are available on the Financial Reporting Council's website: frc.org.uk.

The Board has considered the principles and recommendations of the AIC Code of Corporate Governance as published in February 2015 (AIC Code) by reference to the AIC Corporate Governance Guide for Investment Companies (AIC Guide). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code, as well as setting out additional principles and recommendations on issues which are of specific relevance to the Company. Both the AIC Code and the AIC Guide are available on the AIC's website: theaic.co.uk.

The Company has complied throughout the accounting period with the relevant provisions contained within the AIC Code and the relevant provisions of the UK Corporate Governance Code except as set out below.

The UK Corporate Governance Code includes provisions relating to:

- the role of the chief executive (A.1.2);

- executive directors' remuneration (D.2.1 and D.2.2);

- and the need for an internal audit function (C.3.5).

For the reasons set out in the AIC Code, and as explained in the UK Corporate Governance Code, the Board considers that these provisions are not relevant to the position of the Company, being an externally-managed investment company. In particular, all of the Company's day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of these provisions.

The full text of the Company's Corporate Governance Statement can be found on the Company's website, murray-intl.co.uk.

Directors have attended Board and Committee meetings during the year ended 31 December 2016 as follows (with their eligibility to attend the relevant meeting in brackets):

	Board	Other Board	Nom Com	Audit Com	MEC/ Rem
K J Carter ^A	6 (6)	1 (1)	1 (1)	n/a	1 (1)
J D Best	6 (6)	1 (1)	1 (1)	3 (3)	2 (2)
M Campbell	6 (6)	1 (1)	1 (1)	3 (3)	2 (2)
P W Dunscombe	6 (6)	0 (1)	1 (1)	3 (3)	2 (2)
D Hardie	6 (6)	1 (1)	1 (1)	3 (3)	2 (2)
A Mackesy ^B	3 (3)	1 (1)	0 (0)	2 (2)	1 (1)
Lady Balfour of Burleigh ^C	3 (3)	0 (0)	1 (1)	1 (1)	1 (1)

^A Dr Carter is not a member of either the Audit Committee or the Remuneration Committee but attended all Committee meetings by invitation

^BMrs Mackesy was appointed a Director on 1 May 2016

^CLady Balfour retired as a Director on 26 April 2016

Board Committees

Terms of Reference

The terms of reference of all the Board Committees may be found on the Company's website murray-intl.co.uk and copies are available from the Company Secretary upon request. The terms of reference are reviewed and re-assessed by the Board for their adequacy on an annual basis.

Management Engagement Committee (MEC)

The MEC comprises all of the Directors. Dr Carter is the Chairman. The Committee reviews the performance of the Manager and its compliance with the terms of the management and secretarial agreement. The terms and conditions of the Manager's appointment, including an evaluation of fees, are reviewed by the Committee on an annual basis. The Committee believes that the continuing appointment of the Manager on the terms that have been agreed is in the interests of shareholders as a whole.

Nomination Committee

All appointments to the Board of Directors are considered by the Nomination Committee which comprises the entire Board and is chaired by Dr Carter. The Board's overriding priority in appointing new Directors to the Board is to identify the candidate with the best range of skills and experience to complement existing Directors. The Board also recognises the benefits of diversity and its policy on diversity is referred to in the Strategic Report. When Board positions become available as a result of retirement or resignation, the Company ensures that a diverse group of candidates is considered.

During the year the Nomination Committee undertook a search for a new Director using the services of Korn Ferry, an independent specialist recruitment consultant. Having reviewed a long list and interviewed a short list of possible candidates Mrs Alexandra Mackesy was appointed to the Board on 1 May 2016.

The Committee has put in place the necessary procedures to conduct, on an annual basis, an appraisal of the Chairman of the Board, Directors' individual self evaluation and a performance evaluation of the Board as a whole. The appraisal process concluded that the Board has a good balance of experience and knowledge of investment markets and continues to work in a collegiate and effective manner. An external evaluation was last undertaken in 2015 by Stephenson & Co an independent external board evaluation service provider that does not have any other connections with the Company.

The Board's policy on tenure is that Directors need not serve on the Board for a limited period of time only. The Board does not consider that the length of service of a Director is as important as the contribution he or she has to make, and therefore the length of service will be determined on a case-by-case basis.

In accordance with Principle 3 of the AIC's Code of Corporate Governance which recommends that the directors of FTSE 350 companies should be subject to annual re-election by shareholders, all the members of the Board will retire at the forthcoming Annual General Meeting and will offer themselves for re-election. In conjunction with the evaluation feedback the Committee has reviewed each of the proposed reappointments and concluded that each of the Directors has the requisite high level and range of business and financial experience and recommends their re-election at the forthcoming AGM.

Remuneration Committee

The level of fees payable to Directors is considered by the Remuneration Committee which comprises the entire Board excluding Dr Carter and which is chaired by Mr Dunscombe.

The Company's remuneration policy is to set remuneration at a level to attract individuals of a calibre appropriate to the Company's future development. Further information on remuneration is disclosed in the Directors' Remuneration Report.

Going Concern

The Directors have undertaken a robust review of the Company's viability (refer to statement Strategic Report) and ability to continue as a going concern. The Company's assets consist of a diverse portfolio of listed equity shares and bonds. The equities and a majority of the bond portfolio are, in most circumstances, realisable within a very short timescale.

The Company has a £60 million loan facility with RBS which is due to mature in May 2017. The Directors are currently reviewing options to replace the facility. However, at this stage it is too early to confirm that the facility will be renewed. If acceptable terms are available from the existing bankers, or any alternative, the Company expects to continue to access a similarly sized facility. However, should the Board decide not to replace the facility any maturing debt would be repaid through the proceeds of equity and/or bond sales.

The Directors are mindful of the principal risks and uncertainties disclosed in the Strategic Report and have reviewed forecasts detailing revenue and liabilities. The Directors believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future and at least 12 months from the date of this Annual Report. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.

Accountability and Audit

Each Director confirms that, so far as he or she is aware, there is no relevant audit information of which the Company's auditor is unaware, and he or she has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Independent Auditor

The Company's policy is to conduct a regular review of its audit arrangements. The last tender took place in 2013 and following a detailed and rigorous process involving large and medium-sized audit firms the Board's recommendation to shareholders to reappoint Ernst & Young LLP ("EY") was duly approved. EY, has expressed its willingness to continue in office and a Resolution to re-appoint EY as the Company's auditor will be put to the forthcoming Annual General Meeting, along with a separate Resolution to authorise the Directors to fix the auditor's remuneration. Details of fees relating to non-audit services are disclosed in the notes to the financial statements. The Directors have reviewed the level of non-audit services provided by the independent auditor during the year, together with the independent auditor's procedures in connection with the provision of such services, and remain satisfied that the auditor's objectivity and independence is being safeguarded. With effect from 1 January 2017 Deloitte has been appointed to provide local tax compliance services to the Company and EY has ceased to provide these tax services to the company.

Internal Controls and Risk Management

Details of the financial risk management policies and objectives relative to the use of financial instruments by the Company are set out in note 18 to the financial statements.The Board of Directors is ultimately responsible for the Company's system of internal control and for reviewing its effectiveness. Following the Financial Reporting Council's publication of "Guidance on Risk Management, Internal Controls and Related Financial and Business Reporting" (the "FRC Guidance"), the Directors confirm that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place for the full year under review and up to the date of approval of the financial statements, and this process is regularly reviewed by the Board and accords with the relevant sections of the FRC Guidance.

The design, implementation and maintenance of controls and procedures to safeguard the assets of the Company and to manage its affairs properly extends to operational and compliance controls and risk management. The Board has prepared its own risk register which identifies potential risks relating to strategy, investment management, shareholders, marketing, gearing, regulatory and financial obligations; third party service providers and the Board. The Board considers the potential cause and possible impact of these risks as well as reviewing the controls in place to mitigate these potential risks. A risk is rated by having a likelihood and an impact rating and the residual risk is plotted on a "heat map" and is reviewed regularly.

The Board has reviewed the effectiveness of the system of internal control and, in particular, it has reviewed the process for identifying and evaluating the significant risks faced by the Company and the policies and procedures by which these risks are managed.

The Directors have delegated the investment management of the Company's assets to AFML within overall guidelines and this embraces implementation of the system of internal control, including financial, operational and compliance controls and risk management. Internal control systems are monitored and supported by AFML's internal audit function which undertakes periodic examination of business processes, including compliance with the terms of the management agreement, and ensures that recommendations to improve controls are implemented.

The Board has reviewed the effectiveness of the Aberdeen Group's system of internal control including its annual internal controls report prepared in accordance with the International Auditing and Assurance Standards Board's International Standard on Assurances Engagements ("ISAE") 3402, "Assurance Reports on Controls at a Service Organisation". The Board has also reviewed Aberdeen's process for identifying and evaluating the significant risks faced by the Company and the policies and procedures by which these risks are managed.

Risks are identified and documented through a risk management framework by each function within the Manager's activities. Risk is considered in the context of the FRC Guidance and includes financial, regulatory, market, operational and reputational risk. This helps the Manager's internal audit risk assessment model to identify those functions for review. Any relevant weaknesses identified through internal audit's review are reported to the Board and timetables are agreed for implementing improvements to systems, processes and controls. The implementation of any remedial action required is monitored and feedback provided to the Board.

The key components designed to provide effective internal control for the year under review and up to the date of this Report are outlined below:

- the Manager prepares forecasts and management accounts which allow the Board to assess the Company's activities and review its investment performance;

- the Board and Manager have agreed clearly defined investment criteria;

- there are specified levels of authority and exposure limits. Reports on these issues, including performance statistics and investment valuations, are regularly submitted to the Board. The Manager's investment process and financial analysis of the companies concerned include detailed appraisal and due diligence;

- as a matter of course the internal audit and compliance departments of AFML continually review the Manager's operations;

- written agreements are in place which specifically define the roles and responsibilities of the Manager and other third party service providers and monitoring reports are received from these providers when required;

- the Board has considered the need for an internal audit function but, because of the compliance and internal control systems in place at the Manager, has decided to place reliance on the Manager's systems and internal audit procedures; and

- twice a year, at its Board meetings, the Board carries out an assessment of internal controls by considering documentation from the Manager, including its internal audit and compliance functions and taking account of events since the relevant period end.

In addition, the Manager ensures that clearly documented contractual arrangements exist in respect of any activities that have been delegated to external professional organisations. The Board meets annually with representatives from BNY Mellon and reviews a control report covering the activities of the depositary and custodian.

Representatives from the Internal Audit Department of the Manager report six monthly to the Audit Committee of the Company and have direct access to the Directors at any time.

The internal control systems are designed to meet the Company's particular needs and the risks to which it is exposed. Accordingly, the internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and, by their nature, can provide reasonable but not absolute assurance against material misstatement or loss.

Discount Management Policy and Special Business at Annual General Meeting

Share Buybacks

At the Annual General Meeting held on 26 April 2016, shareholders approved the renewal of the authority permitting the Company to repurchase its Ordinary shares.

The Directors wish to renew the authority given by shareholders at the last Annual General Meeting. The principal aim of a share buyback facility is to enhance shareholder value by acquiring shares at a discount to NAV, as and when the Directors consider this to be appropriate. The purchase of shares, when they are trading at a discount to NAV per share, should result in an increase in the NAV per share for the remaining shareholders. This authority, if conferred, will only be exercised if to do so would result in an increase in the NAV per share for the remaining shareholders and if it is in the best interests of shareholders generally. Any purchase of shares will be made within guidelines established from time to time by the Board. It is proposed to seek shareholder authority to renew this facility for another year at the Annual General Meeting.

Under the Listing Rules, the maximum price that may be paid on the exercise of this authority must not be more than the higher of (i) an amount equal to 105% of the average of the middle market quotations for a share taken from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the share is purchased; and (ii) the higher of the last independent trade and the current highest independent bid on the trading venue where the purchase is carried out. The minimum price which may be paid is 25p per share.

It is currently proposed that any purchase of shares by the Company will be made from the capital reserve of the Company. The purchase price will normally be paid out of the cash balances held by the Company from time to time.

Special Resolution 15 will permit the Company to buy back shares and any shares bought back by the Company may be cancelled or held as Treasury shares. The benefit of the ability to hold Treasury shares is that such shares may be resold. This should give the Company greater flexibility in managing its share capital and improve liquidity in its shares. The Company would only sell on Treasury shares at a premium to NAV. When shares are held in Treasury, all voting rights are suspended and no distribution (either by way of dividend or by way of a winding up) is permitted in respect of Treasury shares. If the Directors believe that there is no likelihood of re-selling shares bought back, such shares would be cancelled.

Special Resolution 15 in the Notice of Annual General Meeting will renew the authority to purchase in the market a maximum of 14.99% of shares in issue at the date of the Annual General Meeting (amounting to 19,109,887 Ordinary shares as at 10 March 2017). Such authority will expire on the date of the 2018 Annual General Meeting or on 30 June 2018, whichever is earlier. This means in effect that the authority will have to be renewed at the next Annual General Meeting or earlier if the authority has been exhausted.

Issue of Shares

In terms of the Companies Act 2006 (the "Act") the Directors may not allot shares unless so authorised by the shareholders. Resolution 13 in the Notice of Annual General Meeting which will be proposed as an Ordinary Resolution will, if passed, give the Directors the necessary authority to allot shares up to an aggregate nominal amount of £3,187,106 (equivalent to 12,748,424 Ordinary shares or 10% of the Company's existing issued share capital at 10 March 2017, the latest practicable date prior to the publication of this Annual Report). Such authority will expire on the date of the next Annual General Meeting or on 30 June 2018, whichever is earlier. This means that the authority will have to be renewed at the next Annual General Meeting.

When shares are to be allotted for cash, Section 561 of the Act provides that existing shareholders have pre-emption rights and that the new shares must be offered first to such shareholders in proportion to their existing holding of shares. However, shareholders can, by special resolution, authorise the Directors to allot shares otherwise than by a pro rata issue to existing shareholders. Special Resolution 14 will, if passed, also give the Directors power to allot for cash equity securities up to an aggregate nominal amount of £3,187,106 (equivalent to 12,748,423 Ordinary shares or 10% of the Company's existing issued share capital at 10 March 2017, the latest practicable date prior to the publication of this Annual Report), as if Section 561 of the Act does not apply. This is the same nominal amount of share capital which the Directors are seeking the authority to allot pursuant to Resolution 13. This authority will also expire on the date of the 2018 Annual General Meeting or on 30 June 2018, whichever is earlier. This authority will not be used in connection with a rights issue by the Company.

The Directors intend to use the authority given by Resolutions 13 and 14 to allot shares and disapply pre-emption rights only in circumstances where this will be clearly beneficial to shareholders as a whole. Accordingly, issues will only be made where shares can be issued at a premium of 0.5% or more to NAV and there will never be any dilution for existing shareholders. The issue proceeds will be available for investment in line with the Company's investment policy. No issue of shares will be made which would effectively alter the control of the Company without the prior approval of shareholders in general meeting. Resolution 14 will also disapply pre-emption rights on the sale of Treasury shares as envisaged above. Once again, the pre-emption rights would only be disapplied where the Treasury shares are sold at a premium to NAV of not less than 0.5%.

Recommendation

The Directors consider that the authorities granted above are in the best interests of the shareholders taken as a whole and recommend that all shareholders vote in favour of the resolutions, as the Directors intend to in respect of their own beneficial holdings of Ordinary shares amounting in aggregate to 114,391 shares, representing approximately 0.1% of the Company's issued share capital as at 10 March 2017.

The UK Stewardship Code and Proxy Voting

Responsibility for actively monitoring the activities of portfolio companies has been delegated by the Board to the AIFM which has sub-delegated that authority to the Manager.

The full text of the Company's response to the Stewardship Code may be found on the Company's website.

Relations with Shareholders

The Directors place a great deal of importance on communication with shareholders. The Annual Report is widely distributed to other parties who have an interest in the Company's performance. Shareholders and investors may obtain up to date information on the Company through the Manager's freephone information service and the Company's website (murray-intl.co.uk). The Company responds to letters from shareholders on a wide range of issues.

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the Aberdeen Group (either the Company Secretary or the Manager) in situations where direct communication is required and usually a representative from the Board meets with major shareholders on an annual basis in order to gauge their views.

Responsible Investment

The Board is aware of its duty to act in the interests of the Company. The Board acknowledges that there are risks associated with investment in companies which fail to conduct business in a socially responsible manner. The Manager considers social, environmental and ethical factors which may affect the performance or value of the Company's investments. The Directors, through the Company's Manager, encourage companies in which investments are made to adhere to best practice in the area of Corporate Governance. They believe that this can best be achieved by entering into a dialogue with company management to encourage them, where necessary, to improve their policies in this area.

By order of the Board of Murray International Trust PLC

Aberdeen Asset Management PLC

Secretary

40 Princes Street,

Edinburgh EH2 2BY

10 March 2017

6. FINANCIAL HIGHLIGHTS

	31 December 2016	31 December 2015	% change
Total assets less current liabilities (before deducting prior charges)	£1,633,029,000	£1,285,193,000
Equity shareholders' funds (Net Assets)	£1,447,879,000	£1,091,019,000
Market capitalisation	£1,514,513,000	£1,065,058,000	+42.2
Share price - Ordinary share (mid market)	1188.0p	829.5p	+43.2
Share price - B Ordinary share (mid market){A}	n/a	725.0p	n/a
Net Asset Value per Ordinary and B Ordinary share{A}	1,135.7p	849.0p	+33.8
Premium/(discount) to Net Asset Value on Ordinary shares	4.6%	(2.30%)

Gearing (ratio of borrowings less cash to shareholders' funds)
Net gearing{B}	12.5%	17.4%

Dividends and earnings per Ordinary share
Revenue return per share	51.2p	45.7p	+12.1
Dividends per share{C}	47.5p	46.5p	+2.2
Dividend cover (including proposed final dividend)	1.08	0.98
Revenue reserves{D}	£70,963,000	£64,767,000

Ongoing charges{E}
Excluding performance fee	0.68%	0.75%
Including performance fee	N/A	0.75%

{A} On 1 July 2016, all B Ordinary shares were converted into Ordinary shares of 25p (see note 15).
{B} Calculated in accordance with AIC guidance "Gearing Disclosures post RDR".
{C} The figure for dividends per share reflects the years to which their declaration relates (see note 9) and assuming approval of the 16.0p (2015 - 15.0p) final dividend.
{D} The revenue reserve figure does not take account of the third interim and final dividends amounting to £13,386,000 and £20,397,000 respectively (2015 - £13,398,000 and £19,050,000).
{E} Ongoing charges are calculated in accordance with guidance issued by the AIC as the total of the investment management fee and administrative expenses divided by the average cum income net asset value throughout the year. With effect from 1 January 2016, the performance fee was discontinued.

Performance (total return)

	1 year	3 year	5 year	10 year
	% return	% return	% return	% return
Share price{A}	+50.5	+29.8	+60.8	+184.3
Net asset value per Ordinary and B Ordinary share	+40.3	+33.2	+58.9	+152.2
Benchmark	+25.8	+38.6	+87.2	+114.1
Total return represents the capital return plus dividends reinvested.
{A} Mid to mid.

7. STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgments and accounting estimates that are reasonable and prudent; and,

- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Statement of Corporate Governance that comply with that law and those regulations.

The financial statements are published on murray-intl.co.uk which is a website maintained by the Company's Manager. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors confirms that to the best of his or her knowledge:

- the financial statements, prepared in accordance with the applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company;

- the Strategic Report and Directors' Report include a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that the Company faces; and

- that in the opinion of the Board, the Annual Report and Financial Statements taken as a whole, is fair, balanced and understandable and it provides the information necessary to assess the Company's performance, business model and strategy.

For Murray International Trust PLC

Kevin Carter

Chairman

10 March 2017

8. STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2016

		Year ended 31 December 2016			Year ended 31 December 2015
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) on investments	11	-	365,124	365,124	-	(145,153)	(145,153)
Income	3	77,333	-	77,333	67,020	-	67,020
Investment management fees	4	(2,080)	(4,853)	(6,933)	(2,108)	(4,919)	(7,027)
Currency gains/(losses)		-	1,106	1,106	-	(304)	(304)
Other expenses	6	(1,890)	-	(1,890)	(1,909)	-	(1,909)
		_______	_______	_______	_______	_______	_______
Net return before finance costs and taxation		73,363	361,377	434,740	63,003	(150,376)	(87,373)

Finance costs	7	(1,358)	(3,168)	(4,526)	(1,427)	(3,328)	(4,755)
		_______	_______	_______	_______	_______	_______
Return on ordinary activities before tax		72,005	358,209	430,214	61,576	(153,704)	(92,128)

Tax on ordinary activities	8	(6,549)	2,186	(4,363)	(2,860)	2,784	(76)
		_______	_______	_______	_______	_______	_______
Return attributable to equity shareholders		65,456	360,395	425,851	58,716	(150,920)	(92,204)
		_______	_______	_______	_______	_______	_______

Return per Ordinary share with full conversion of B Ordinary shares (pence)	10	51.2	282.0	333.2	45.7	(117.5)	(71.8)
		_______	_______	_______	_______	_______	_______

The "Total" column of this statement represents the profit and loss account of the Company. There is no other comprehensive income and therefore the return on ordinary activities after taxation is also the total comprehensive income for the year. The 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of these financial statements.

		£'000	£'000	£'000	£'000	£'000	£'000
Ordinary dividends on equity shares	9	59,260	-	59,260	58,639	-	58,639
		_______	_______	_______	_______	_______	_______

The above dividend information does not form part of the Statement of Comprehensive Income.

9. STATEMENT OF FINANCIAL POSITION

As at 31 December 2016

		As at		As at
		31 December 2016		31 December 2015
	Notes	£'000	£'000	£'000	£'000
Non-current assets
Investments listed at fair value through profit or loss	11		1,618,893		1,273,121

Current assets
Debtors	12	12,842		10,013
Cash and short term deposits		3,897		4,648
		_______		_______
		16,739		14,661
		_______		_______

Creditors: amounts falling due within one year
Bank loans	13/14	(60,000)		(24,024)
Other creditors	13	(2,603)		(2,589)
		_______		_______
		(62,603)		(26,613)
		_______		_______
Net current liabilities			(45,864)		(11,952)
			_______		_______
Total assets less current liabilities			1,573,029		1,261,169

Creditors: amounts falling due after more than one year
Bank loans and debentures	13/14	(125,150)		(170,150)
		_______		_______
			(125,150)		(170,150)
			_______		_______
Net assets			1,447,879		1,091,019
			_______		_______

Capital and reserves
Called-up share capital	15		32,137		32,128
Share premium account			349,581		349,338
Capital redemption reserve			8,230		8,230
Capital reserve	16		986,968		636,556
Revenue reserve			70,963		64,767
			_______		_______
Equity shareholders' funds			1,447,879		1,091,019
			_______		_______

Net Asset Value per Ordinary and B Ordinary share (pence)	17		1,135.7		849.0
			_______		_______

10. STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2016
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2015		32,128	349,338	8,230	636,556	64,767	1,091,019
Return on ordinary activities after taxation		-	-	-	360,395	65,456	425,851
Dividends paid	9	-	-	-	-	(59,260)	(59,260)
Allotment and bonus issue of B Ordinary shares converted to Ordinary shares	15	9	-	-	(27)	-	(18)
Issue of shares from Treasury	15	-	243	-	1,262	-	1,505
Buyback of shares for Treasury	15	-	-	-	(11,218)	-	(11,218)
		_______	______	______	_______	______	_______
Balance at 31 December 2016		32,137	349,581	8,230	986,968	70,963	1,447,879
		_______	______	______	_______	______	_______

For the year ended 31 December 2015
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2014		32,084	348,045	8,230	787,488	64,690	1,240,537
Return on ordinary activities after taxation		-	-	-	(150,920)	58,716	(92,204)
Dividends paid	9	-	-	-	-	(58,639)	(58,639)
Issue of new shares	15	44	1,293	-	(12)	-	1,325
		_______	______	______	_______	______	_______
Balance at 31 December 2015		32,128	349,338	8,230	636,556	64,767	1,091,019
		_______	______	______	_______	______	_______

The accompanying notes are an integral part of these financial statements.

11. STATEMENT OF CASH FLOWS

For the year ended 31 December 2016

		Year ended	Year ended
		31 December 2016	31 December 2015
	Notes	£'000	£'000
Net return before finance costs and taxation		434,740	(87,373)
Increase/(decrease) in accrued expenses		59	(185)
Overseas withholding tax		(2,824)	(1,668)
Interest income		(241)	(242)
Dividend income		(56,341)	(49,284)
Fixed interest income		(20,751)	(15,554)
Realised gains/(losses) on foreign exchange transactions		1,536	(182)
Fixed interest income received		17,816	17,154
Dividends received		54,537	47,621
Interest received		241	242
Interest paid		(4,571)	(4,795)
(Gains)/losses on investments		(365,124)	145,153
Amortisation of fixed income book cost		(1,232)	(2,679)
Decrease in other debtors		20	8
Stock dividends included in investment income		-	(1,940)
		________	________
Net cash flow from operating activities		57,865	46,276

Investing activities
Purchases of investments	11	(202,988)	(78,630)
Sales of investments	11	223,572	71,557
		________	________
Net cash from/(used in) investing activities		20,584	(7,073)

Financing activities
Equity dividends paid	9	(59,260)	(58,639)
Share issue	15	1,487	1,325
Buyback of Ordinary shares		(11,218)	-
Loan repayment		(10,209)	(45,007)
Loan drawdown		-	50,000
		________	________
Net cash used in financing activities		(79,200)	(52,321)
		________	________
Decrease in cash		(751)	(13,118)
		________	________
Analysis of changes in cash during the year
Opening balance		4,648	17,766
Decrease in cash as above		(751)	(13,118)
		________	________
Closing balances		3,897	4,648
		________	________

12. NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2016

1.	Principal activity
	The Company is a closed-end investment company, registered in Scotland No SC006705, with its Ordinary shares being listed on the London Stock Exchange.

2.	Accounting policies
	(a)	Basis of preparation
		The financial statements have been prepared in accordance with Financial Reporting Standard 102 and with the AIC's Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'. The financial statements are prepared in sterling which is the functional currency of the Company and rounded to the nearest £'000. They have also been prepared on a going concern basis and on the assumption that approval as an investment trust will continue to be granted.

	(b)	Income
		Dividends receivable on equity shares are treated as revenue for the year on an ex-dividend basis. Where no ex-dividend date is available dividends are recognised on their due date. Provision is made for any dividends not expected to be received. Special dividends are credited to capital or revenue, according to their circumstances.

		In some jurisdictions, investment income and capital gains are subject to withholding tax deducted at the source of the income. The Company presents the withholding tax separately from the gross investment income in the Statement of Comprehensive Income under taxation.

		The fixed returns on debt securities are recognised on a time apportionment basis so as to reflect the effective yield on the debt securities.

		Interest receivable from cash and short-term deposits is accrued to the end of the year.

	(c)	Expenses
		All expenses are accounted for on an accruals basis and are charged to the Statement of Comprehensive Income. Expenses are charged against revenue except as follows:
		transaction costs on the acquisition or disposal of investments are charged against capital in the Statement of Comprehensive Income; and
		expenses are treated as a capital item in the Statement of Comprehensive Income and ultimately recognised in the capital reserve where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect the investment management fee has been allocated 30% to revenue and 70% to the capital reserve to reflect the Company's investment policy and prospective income and capital growth.

	(d)	Taxation
		The tax expense represents the sum of tax currently payable and deferred tax. Any tax payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that were applicable at the Statement of Financial Position date.

		Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the Statement of Financial Position date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the Statement of Financial Position date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods. Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively enacted at the Statement of Financial Position date.

		Due to the Company's status as an investment trust company and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

		The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue within the Statement of Comprehensive Income on the same basis as the particular item to which it relates using the Company's effective rate of tax for the year, based on the marginal basis.

	(e)	Investments
		The Company has chosen to apply the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement (as adopted for use in the EU) and investments have been designated upon initial recognition at fair value through profit or loss. This is done because all investments are considered to form part of a group of financial assets which is evaluated on a fair value basis, in accordance with the Company's documented investment strategy, and information about the grouping is provided internally on that basis.

		Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned, and are measured initially at fair value. Subsequent to initial recognition, investments are valued at fair value through profit or loss. For listed investments, this is deemed to be bid market prices or closing prices for SETS (London Stock Exchange's electronic trading service) stocks sourced from the London Stock Exchange.

		Gains and losses arising from changes in fair value are treated in net profit or loss for the period as a capital item in the Statement of Comprehensive Income and are ultimately recognised in the capital reserve.

	(f)	Borrowings
		Short-term borrowings, which comprise interest bearing bank loans and overdrafts are recognised initially at the fair value of the consideration received, net of any issue expenses, and subsequently at amortised cost using the effective interest method. The finance costs of such borrowings are accounted for on an accruals basis using the effective interest rate method and are charged 30% to revenue and 70% to capital in the Statement of Comprehensive Income to reflect the Company's investment policy and prospective income and capital growth.

	(g)	Nature and purpose of reserves
		Capital redemption reserve
		The capital redemption reserve arose when Ordinary shares were cancelled, at which point an amount equal to the par value of the Ordinary share capital was transferred from the Statement of Comprehensive Income to the capital redemption reserve.

		Capital reserve
		This reserve reflects any gains or losses on investments realised in the period along with any movement in the fair value of investments held that have been recognised in the Statement of Comprehensive Income. These include gains and losses from foreign currency exchange differences. Additionally, expenses, including finance costs, are charged to this reserve in accordance with (c) and (f) above.

		Revenue reserve
		This reserve reflects all income and costs which are recognised in the revenue column of the Statement of Comprehensive Income. The revenue reserve represents the amount of the Company's reserves distributable by way of dividend.

	(h)	Exchange rates
		Transactions involving foreign currencies are converted at the rate ruling at the date of the transaction.

		Monetary assets and liabilities and financial instruments carried at fair value are translated at the rates of exchange at the year end. Differences arising from translation are treated as a gain or loss to capital or revenue within the Statement of Comprehensive Income depending upon the nature of the gain or loss.

	(i)	Derivative financial instruments
		Financial derivatives are measured at fair value based on an appropriate model. Changes in the fair value of derivative financial instruments are recognised in the Statement of Comprehensive Income as they arise. If capital in nature, the associated change in value is presented as a capital item in the Statement of Comprehensive Income.

	(j)	Segmental reporting
		The Directors are of the opinion that the Company is engaged in a single segment of business activity, being investment business. Consequently, no business segmental analysis is provided.

		2016	2015
3.	Income	£'000	£'000
	Income from investments:
	UK dividend income	7,069	6,937
	Overseas dividends	49,272	42,347
	Overseas interest	20,751	15,554
	UK stock dividends	-	1,456
	Overseas stock dividends	-	484
		________	________
		77,092	66,778
	Interest:	________	________
	Deposit interest	241	242
		________	________
	Total income	77,333	67,020
		________	________

		2016	2015
	Income from investments comprises:	£'000	£'000
	Listed UK	7,069	8,393
	Listed overseas	70,023	58,385
		________	________
		77,092	66,778
		________	________

		2016			2015
		Revenue	Capital	Total	Revenue	Capital	Total
4.	Investment management fees	£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fees	2,080	4,853	6,933	2,108	4,919	7,027
		______	______	______	______	______	______

	Details of the fee basis for the year are contained in the Annual Report and in note 21. The balance due to Aberdeen Fund Managers Limited at the year end was £1,766,000 (2015 - £1,703,000).

5.	Performance fees
	With effect from 1 January 2016 performance fee arrangements were discontinued. No performance fee was charged in the year ended 31 December 2015.

		2016	2015
6.	Other expenses	£'000	£'000
	Shareholders' services{A}	640	653
	Directors' remuneration	170	164
	Irrecoverable VAT	36	2
	Secretarial fees{B}	100	100
	Auditor's fees for:
	Statutory audit	27	25
	Other assurance services	5	7
	Tax compliance	4	14
	Administrative expenses{C}	908	944
		________	________
		1,890	1,909
		________	________

	{A} Includes registration, savings scheme and other wrapper administration and promotion expenses, of which £425,000 (2015 - £485,000) was payable to Aberdeen Fund Managers Limited ("AFML") to cover promotional activities during the year. At the year end £104,000 (2015 - £104,000) was due to AFML.
	{B} Details of the fee basis are contained in the Annual Report and in note 21. The balance due to AFML at the year end was £25,000 (2015 - £25,000).
	{C} Includes bank charges and custody fees of £412,000 (2015 - £374,000), depositary fees of £225,000 (2015 - £207,000), stock exchange fees of £75,000 (2015 - £95,000) and printing, postage and stationery costs of £122,000 (2015 - £88,000).

		2016			2015
		Revenue	Capital	Total	Revenue	Capital	Total
7.	Finance costs	£'000	£'000	£'000	£'000	£'000	£'000
	Bank loans and overdrafts	1,356	3,164	4,520	1,425	3,324	4,749
	Debenture stock	2	4	6	2	4	6
		_______	_____	______	______	______	______
		1,358	3,168	4,526	1,427	3,328	4,755
		_______	_____	______	______	______	______

			2016				2015
			Revenue		Capital	Total	Revenue		Capital	Total
8.	Taxation		£'000		£'000	£'000	£'000		£'000	£'000
	(a)	Total tax charge
		Analysis of total tax charge for the year
		Current UK tax	515		-	515	608		-	608
		Double taxation relief	(515)		-	(515)	(608)		-	(608)
		Tax relief to capital	3,077		(3,077)	-	1,893		(1,893)	-
		Irrecoverable overseas tax suffered	5,133		-	5,133	3,513		-	3,513
		Overseas tax reclaimable	(1,316)		-	(1,316)	(538)		-	(538)
		French withholding tax reclaimed	(345)		-	(345)	(2,008)		-	(2,008)
			______		______	______	______		______	______
		Current tax charge for the year	6,549		(3,077)	3,472	2,860		(1,893)	967
		Deferred tax	-		891	891	-		(891)	(891)
			______		______	______	______		______	______
		Total tax charge	6,549		(2,186)	4,363	2,860		(2,784)	76
			______		______	______	______		______	______
	(b)	Factors affecting the tax charge for the year
		The UK corporation tax rate is 20% (2015 - effective rate of 20.25%). The tax assessed for the year is lower than the corporation tax rate. The differences are explained below:

			2016				2015
			Revenue	Capital		Total	Revenue	Capital		Total
			£'000	£'000		£'000	£'000	£'000		£'000
		Return on ordinary activities before taxation	72,005	358,209		430,214	61,576	(153,704)		(92,128)
			______	______		______	______	______		______
		Tax thereon at an effective rate of 20% (2015 - 20.25%)	14,401	71,642		86,043	12,469	(31,125)		(18,656)
		Effects of:
		Non taxable UK dividend income	(1,414)	-		(1,414)	(1,405)	-		(1,405)
		Gains/(losses) on investments not taxable	-	(73,025)		(73,025)	-	29,393		29,393
		Currency (gains)/losses not taxable	-	(221)		(221)	-	62		62
		Non taxable overseas dividends	(9,395)	-		(9,395)	(7,564)	-		(7,564)
		Non taxable stock dividends	-	-		-	(393)	-		(393)
		Irrecoverable overseas tax suffered	5,133	-		5,133	3,513	-		3,513
		Overseas tax reclaimable	(1,316)	-		(1,316)	(538)	-		(538)
		French withholding tax reclaimed	(345)	-		(345)	(2,008)	-		(2,008)
		Double taxation relief	(515)	-		(515)	(608)	-		(608)
		Tax relief to capital	3,077	(3,077)		-	1,893	(1,893)		-
		Capital expenses utilised	(3,077)	3,077		-	(2,499)	1,670		(829)
		Utilisation of unrecognised deferred tax on excess management expenses	-	(582)		(582)	-	(891)		(891)
			______	______		______	______	______		______
		Total tax charge for the year	6,549	(2,186)		4,363	2,860	(2,784)		76
			______	______		______	______	______		______

		The Company has not provided for deferred tax on chargeable gains or losses arising on the revaluation or disposal of investments as it is exempt from corporation tax on these items because of its status as an investment trust company.

		The Company has not recognised a deferred tax asset (2015 - recognised - £891,000) arising as a result of there being no excess management expenses (2015 - £4,455,000) to be utilised in future periods.

		2016	2015
9.	Ordinary dividends on equity shares	£'000	£'000
	Amounts recognised as distributions paid during the year:
	Third interim for 2015 of 10.5p (2014 - 10.0p)	13,398	12,736
	Final dividend for 2015 of 15.0p (2014 - 15.0p)	19,038	19,107
	First interim for 2016 of 10.5p (2015 - 10.5p)	13,424	13,398
	Second interim for 2016 of 10.5p (2015 - 10.5p)	13,400	13,398
		______	______
		59,260	58,639
		______	______

	A third interim dividend was declared on 30 November 2016 with an ex date of 5 January 2017. This dividend of 10.5p was paid on 17 February 2017 and has not been included as a liability in these financial statements. The proposed final dividend for 2016 is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements..

	Set out below are the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of Sections 1158-1159 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £65,456,000 (2015 - £58,716,000).

		2016	2015
		£'000	£'000
	Three interim dividends for 2016 of 10.5p (2015 - 10.5p)	40,210	40,169
	Proposed final dividend for 2016 of 16.0p (2015 - 15.0p)	20,397	19,050
		______	______
		60,607	59,219
		______	______

	The amount reflected above for the cost of the proposed final dividend for 2016 is based on 127,484,238 Ordinary shares in issue, being the number of Ordinary shares in issue at the date of this Report.

		2016		2015
10.	Return per Ordinary share	£'000	p	£'000	p
	Returns are based on the following figures:
	Revenue return	65,456	51.2	58,716	45.7
	Capital return	360,395	282.0	(150,920)	(117.5)
		______	______	______	______
	Total return	425,851	333.2	(92,204)	(71.8)
		______	______	______	______

	Weighted average number of Ordinary shares		127,354,539		127,496,502
	Weighted average number of B Ordinary shares		459,028		942,862
			_________		_________
	Weighted average number of Ordinary shares following conversion of B Ordinary shares		127,813,567		128,439,364
			_________		_________

	On 1 July 2016, all of the outstanding B Ordinary shares in issue were converted into Ordinary shares of 25p (further details are disclosed within note 15). The figure for 2015 assumes full conversion of B Ordinary shares.

			2016		2015
11.	Investments listed at fair value through profit or loss		£'000		£'000
	Opening valuation		1,273,121		1,408,332
	Opening investment holdings gains		(160,847)		(340,581)
			______		______
	Opening book cost		1,112,274		1,067,751
	Movements during the year:
	Purchases		202,988		78,820
	Sales - proceeds		(223,572)		(71,557)
	Sales - realised gains		39,858		34,581
	Accretion of fixed income book cost		1,232		2,679
			______		______
	Closing book cost		1,132,780		1,112,274
	Closing investment holdings gains		486,113		160,847
			______		______
	Closing valuation		1,618,893		1,273,121
			______		______

			2016		2015
	The portfolio valuation		£'000		£'000
	Listed on stock exchanges at bid valuation:
	United Kingdom:
	- equities		199,382		137,793
	- fixed income		7,191		6,875
	Overseas:
	- equities		1,151,645		969,609
	- fixed income		260,675		158,844
			______		______
	Total		1,618,893		1,273,121
			______		______

			2016		2015
	Gains/(losses) on investments		£'000		£'000
	Realised gains based on book cost		39,858		34,581
	Net movement in investment holdings gains		325,266		(179,734)
			______		______
			365,124		(145,153)
			______		______

	All investments are categorised as held at fair value through profit and loss and were designated as such upon initial recognition.

	Transaction costs
	During the year expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains/(losses) on investments in the Statement of Comprehensive Income. The total costs were as follows:

		2016		2015
		£'000		£'000
	Purchases	231		86
	Sales	157		58
		______		______
		388		144
		______		______

		2016	2015
12.	Debtors: amounts falling due within one year	£'000	£'000
	Current taxation	1,318	1,966
	Deferred tax	-	891
	Forward currency contracts	-	351
	Other debtors	68	88
	Accrued income	11,456	6,717
		______	______
		12,842	10,013
		______	______
	None of the above amounts are overdue or impaired.

		2016	2015
13.	Creditors	£'000	£'000
	Amounts falling due within one year:
	Bank loans (note 14)	60,000	24,024
	Accruals	2,603	2,589
		______	______
		62,603	26,613
		______	______

		2016	2015
		£'000	£'000
	Amounts falling due after more than one year:
	Bank loans and Debentures (note 14)	125,150	170,150
		______	______

	All financial liabilities are included at amortised cost.

			2016	2015
14.	Bank loans and Debentures		£'000	£'000
	Secured by floating charge and repayable other than by instalments or at the Company's option:
	-	4% Debenture Stock - Perpetual	150	150
	Unsecured bank loans repayable within one year:
	-	Yen 1,600,000,000 at 2.82% - 15 May 2016	-	9,024
	-	£15,000,000 at 2.00% - 16 May 2016	-	15,000
	-	£60,000,000 at 2.21% - 31 May 2017	60,000	-
	Unsecured bank loans repayable in more than one year but no more than five years:
	-	£60,000,000 at 2.21% - 31 May 2017	-	60,000
	-	£60,000,000 at 2.575% - 31 May 2018	60,000	60,000
	-	£15,000,000 at 1.467% - 16 May 2019	15,000	-
	-	£50,000,000 at 2.4975% - 13 May 2020	50,000	50,000
			______	______
			185,150	194,174
			______	______

	The terms of these loans permit early repayment at the borrower's option which may give rise to additional amounts being either payable or repayable in respect of fluctuations in interest rates since drawdown. Since the Directors currently have no intention of repaying the loans early, then no such charges are included in the cash flows used to determine their effective interest rate.

	The Company currently has four fixed rate term loan facilities with The Royal Bank of Scotland plc ("RBS"), all of which are fully drawn down and have maturity dates of 31 May 2017, 31 May 2018, 16 May 2019 and 13 May 2020 respectively.

	Financial covenants contained within the relevant loan agreements provide, inter alia, that borrowings shall at no time exceed 40% of net assets and that the net assets must exceed £600 million. At 31 December 2016 net assets were £1,447,879,000 and borrowings were 12.8% thereof. The Company has complied with all financial covenants throughout the year.

			2016		2015
	15.	Share capital	Number	£'000	Number	£'000
		Allotted, called up and fully paid Ordinary shares of 25p each:
		Balance brought forward	127,601,952	31,900	127,361,901	31,840
		Ordinary shares issued in the year	-	-	130,000	32
		Ordinary shares bought back for Treasury in the year	(1,221,463)	(305)	-	-
		Ordinary shares issued from Treasury in the year	155,625	39	-	-
		B Ordinary shares converted to Ordinary shares in the year	948,124	237	110,051	28
			__________	______	__________	______
		Balance carried forward	127,484,238	31,871	127,601,952	31,900
			__________	______	__________	______
		Allotted, called up and fully paid B Ordinary shares of 25p each:
		Balance brought forward	910,364	228	975,063	244
		Allotment of B Ordinary shares by capitalisation	28,528	7	45,352	11
		Bonus issue of B Ordinary shares	9,232	2	-	-
		B Ordinary shares converted to Ordinary shares in the year	(948,124)	(237)	(110,051)	(28)
			__________	______	__________	______
		Balance carried forward	-	-	910,364	228
			__________	______	__________	______
		Treasury shares:
		Balance brought forward	-	-	-	-
		Ordinary shares bought back for Treasury in the year	1,221,463	305	-	-
		Ordinary shares issued from Treasury in the year	(155,625)	(39)	-	-
			__________	______	__________	______
		Balance carried forward	1,065,838	266	-	-
			__________	______	__________	______

During the year 1,221,463 (2015 - nil) Ordinary shares were repurchased by the Company at a total cost, including transaction costs of £11,218,000 (2015 - £nil). All of these shares were placed in Treasury. Shares held in Treasury represent 0.8% of the Company's total issued share capital at 31 December 2016.

During the year 155,625 (2015 - nil), Ordinary shares were issued from Treasury. All these shares were issued at a premium to net asset value, enhancing net assets per share for existing shareholders. The issue prices ranged from 948p to 1147p and raised a total of £1,505,000, net of expenses. In 2015, 130,000 shares were issued pursuant to the Company's block listing facility, at a premium to net asset value, enhancing net assets per share for existing shareholders, and raised a total of £1,325,000, net of expenses. These expenses were offset against the capital reserve.

In accordance with Article 131 of the Company's Articles of Association, 11,808 B Ordinary shares and 16,720 B Ordinary shares were allotted by way of capitalisation of reserves on 18 February and 18 May respectively.

On 1 July 2016, following a bonus offer of additional shares at a ratio of 101 for every 100 B Ordinary shares, all B Ordinary shares were converted into Ordinary shares of 25p.

On a winding up of the Company, any surplus assets available after payment of all debts and satisfaction of all liabilities of the Company shall be applied in repaying the Ordinary shareholders the amounts paid up on such shares. Any surplus shall be divided among the holders of Ordinary shares according to the amount paid up on such shares respectively.

Voting rights
In accordance with the Articles of Association of the Company, on a show of hands, every member (or duly appointed proxy) present at a general meeting of the Company has one vote; and, on a poll, every member present in person or by proxy shall have one vote for every 25p nominal amount of Ordinary shares held.

		2016	2015
16.	Capital reserve	£'000	£'000
	At 31 December 2015	636,556	787,488
	Movement in fair value gains	365,124	(145,153)
	Capital expenses (net of tax)	(5,835)	(5,463)
	Cost of issue of shares	(27)	(12)
	Issue of shares from Treasury	1,262	-
	Buyback of shares for Treasury	(11,218)	-
	Currency gains/(losses)	1,106	(304)
		______	______
	At 31 December 2016	986,968	636,556
		______	______


	Included in the total above are investment holdings gains at the year end of £486,113,000 (2015 - £160,847,000).

17.	Net asset value per share
	The net asset value per share and the net asset value attributable to the Ordinary shares, at the year end calculated in accordance with the Articles of Association were as follows:

		Net asset value		Net asset value
		per share		attributable
		2016	2015	2016	2015
		p	p	£'000	£'000
	Ordinary shares (note 15)	1,135.7	849.0	1,447,879	1,091,019

18.	Financial instruments and risk management
	The Company's investment activities expose it to various types of financial risk associated with the financial instruments and markets in which it invests. The Company's financial instruments other than derivatives, comprise listed equities, cash balances, loans and debentures and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and debtors for accrued income. The Company may enter into derivative transactions for the purpose of managing market risks arising from the Company's activities in the form of swap contracts, forward foreign currency contracts, futures and options. The Company utilised forward foreign currency contracts during the year.

	The Board has delegated the risk management function to Aberdeen Fund Managers Limited ("AFML") under the terms of its management agreement with AFML (further details of which are included in the Directors' Report). The Board regularly reviews and agrees policies for managing each of the key financial risks identified with the Manager. The types of risk and the Manager's approach to the management of each type of risk, are summarised below. Such approach has been applied throughout the year and has not changed since the previous accounting period. The numerical disclosures exclude short-term debtors and creditors.

	Risk management framework
	The directors of AFML collectively assume responsibility for AFML's obligations under the AIFMD including reviewing investment performance and monitoring the Company's risk profile during the year.

	AFML is a fully integrated member of the Aberdeen Group, which provides a variety of services and support to AFML in the conduct of its business activities, including in the oversight of the risk management framework for the Company. The AIFM has delegated the day to day administration of the investment policy to Aberdeen Asset Managers Limited, which is responsible for ensuring that the Company is managed within the terms of its investment guidelines and the limits set out in its pre-investment disclosures to investors (details of which can be found on the Company's website). The AIFM has retained responsibility for monitoring and oversight of investment performance, product risk and regulatory and operational risk for the Company.

	The Manager conducts its risk oversight function through the operation of the Group's risk management processes and systems which are embedded within the Group's operations. The Group's Risk Division supports management in the identification and mitigation of risks and provides independent monitoring of the business. The Division includes Compliance, Business Risk, Market Risk, Risk Management and Legal. The team is headed up by the Group's Head of Risk, who reports to the Chief Executive Officer of the Group. The Risk Division achieves its objective through embedding the Risk Management Framework throughout the organisation using the Group's operational risk management system ("SWORD").

	The Group's Internal Audit Department is independent of the Risk Division and reports directly to the Group CEO and to the Audit Committee of the Group's Board of Directors. The Internal Audit Department is responsible for providing an independent assessment of the Group's control environment.

	The Group's corporate governance structure is supported by several committees to assist the board of directors of Aberdeen, its subsidiaries and the Company to fulfil their roles and responsibilities. The Group's Risk Division is represented on all committees, with the exception of those committees that deal with investment recommendations. The specific goals and guidelines on the functioning of those committees are described on the committees' terms of reference.

	Risk management
	The main risks the Company faces from its financial instruments are (i) market risk (comprising interest rate risk, foreign currency risk and price risk), (ii) liquidity risk and (iii) credit risk.

	(i)	Market risk
		The fair value and future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, foreign currency risk and price risk.

		Interest rate risk
		Interest rate risk is the risk that interest rate movements will affect:
		- the fair value of the investments in fixed interest rate securities; and
		- the level of income receivable on cash deposits;

		Management of the risk
		The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions.

		The Board reviews on a regular basis the values of the fixed interest rate securities.

		The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Borrowings comprise fixed rate facilities, which are used to finance opportunities at low rates. Current bank covenant guidelines state that the total borrowings will not exceed 40% of the adjusted net tangible assets of the Company.

		Interest risk profile
		The interest rate risk profile of the portfolio of financial assets and liabilities at the Statement of Financial Position date was as follows:

						Weighted
						average
						period for
						which			Weighted													Non-
						rate is fixed			average interest rate						Fixed rate			Floating rate				interest bearing
		At 31 December 2016				Years			%						£'000			£'000				£'000
		Assets
		Sterling				-			-						7,191			2,652				199,382
		US Dollar				17.83			10.51						122,824			267				418,145
		Other				8.70			8.23						137,851			978				733,500
															______			______				______
		Total assets													267,866			3,897				1,351,027
															______			______				______
		Liabilities
		Bank loans				1.70			2.35						(185,000)			-				-
		Debenture Stock				-			-						(150)			-				-
															______			______				______
		Total liabilities													(185,150)			-				-
															______			______				______

						Weighted
						average
						period for
						which			Weighted													Non-
						rate is fixed			Average interest rate						Fixed rate			Floating rate				interest bearing
		At 31 December 2015				Years			%						£'000			£'000				£'000
		Assets
		Sterling				-			-						6,875			3,627				137,793
		US Dollar				10.00			10.56						86,087			16				336,364
		Other				9.47			8.13						72,757			1,005				633,245
															______			______				______
		Total assets													165,719			4,648				1,107,402
															______			______				______
		Liabilities
		Bank loans				2.36			2.41						(194,024)			-				-
		Debenture Stock				-			-						(150)			-				-
															______			______				______
		Total liabilities													(194,174)			-				-
															______			______				______

		The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the loans. The maturity dates of the Company's loans are shown in note 14 to the financial statements.
		The floating rate assets consist of cash deposits on call earning interest at prevailing market rates.
		The non-interest bearing assets represent the equity element of the portfolio.
		Short-term debtors and creditors have been excluded from the above tables.

	Interest rate sensitivity
	The sensitivity analyses below have been determined based on the exposure to interest rates for non-derivative instruments at the Statement of Financial Position date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates. There is no interest rate risk exposure from derivative instruments.

	If interest rates had been 100 basis points higher or lower (based on current parameter used by the Manager's Investment Risk Department on risk assessment) and all other variables were held constant, the Company's:
	- revenue return for the year ended 31 December 2016 would increase/decrease by £39,000 (2015 - increase/decrease by £46,000). This is mainly attributable to the Company's exposure to interest rates on its floating rate cash balances. These figures have been calculated based on cash positions at each year end.
	- capital reserves would increase/decrease by £7,560,000 (2015 - increase/decrease by £761,000). This is also mainly attributable to the Company's exposure to interest rates on cash balances and its fixed interest portfolio. These figures have been calculated based on cash and fixed interest portfolio positions at each year end.

	In the opinion of the Directors, the above sensitivity analyses are not representative of the year as a whole, since the level of exposure changes frequently as part of the interest rate risk management process used to meet the Company's objectives. The risk parameters used will also fluctuate depending on the current market perception.

	Foreign currency risk
	A significant proportion of the Company's investment portfolio is invested in overseas securities and the Statement of Financial Position can be significantly affected by movements in foreign exchange rates.

	Management of the risk
	It is not the Company's policy to hedge this risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings. A proportion of the Company's borrowings, as detailed in note 14, was in foreign currency as at 31 December 2015. The Manager seeks, when deemed appropriate, to manage exposure to currency movements on borrowings by using forward foreign currency contracts as a hedge against potential foreign currency movements. At 31 December 2016 the Company did not have any forward foreign currency contracts. During the year a gain of £1,551,000 (2015 - loss of £746,000) was realised on forward currency contracts.

	The revenue account is subject to currency fluctuation arising on overseas income. The Company does not hedge this currency risk.

	Currency risk exposure
	Currency risk exposure (excluding fixed interest securities, debentures, and foreign exchange contracts which have been entered to mitigate foreign currency risk) by currency of denomination:

			31 December 2016								31 December 2015
			UK and								UK and
			overseas	Net				Total			overseas							Net				Total
			equity	monetary				currency			equity							monetary				currency
			investments	assets{A}				exposure			investments							assets{A}				exposure
			£'000	£'000				£'000			£'000							£'000				£'000
	US Dollar		418,145	267				418,412			336,364							16				336,380
	Sterling		199,382	(182,347)				17,035			137,793							(181,373)				(43,580)
	Taiwan Dollar		127,298	7				127,305			94,427							-				94,427
	Euro		84,882	-				84,882			82,235							-				82,235
	Swiss Franc		66,377	-				66,377			101,789							-				101,789
	Japanese Yen		66,042	-				66,042			47,987							(9,024)				38,963
	Canadian Dollar		57,902	-				57,902			43,038							-				43,038
	Indonesian Rupiah		55,937	-				55,937			47,220							-				47,220
	Singapore Dollar		53,732	-				53,732			45,659							-				45,659
	Malaysian Ringgit		46,011	-				46,011			43,583							-				43,583
	Hong Kong Dollar		39,798	-				39,798			12,448							-				12,448
	Thailand Baht		32,136	-				32,136			4,299							-				4,299
	Mexican Peso		24,936	-				24,936			26,852							-				26,852
	New Zealand Dollar		17,550	-				17,550			-							-				-
	Swedish Krone		16,670	-				16,670			49,496							-				49,496
	Australian Dollar		16,584	-				16,584			12,922							-				12,922
	South African Rand		16,422	-				16,422			12,801							-				12,801
	Brazilian Real		11,223	971				12,194			8,489							1,004				9,493
			______	______				______			______							______				______
	Total		1,351,027	(181,102)				1,169,925			1,107,402							(189,377)				918,025
			______	______				______			______							______				______

	{A} Reflects cash, short term deposits and bank borrowings.

	The asset allocation between specific markets can vary from time to time based on the Manager's opinion of the attractiveness of the individual markets.

	Foreign currency sensitivity
	The following table details the Company's sensitivity to a 10% decrease (in the context of a 10% increase the figures below should all be read as negative) in sterling against the major foreign currencies in which the Company has exposure (based on exposure >5% of total exposure and excludes foreign exchange contracts due to the reason their being entered into is to mitigate foreign currency risk). The sensitivity analysis includes foreign currency denominated monetary items and adjusts their translation at the year end for a 10% change in foreign currency rates.

								2016			2016						2015				2015
								Revenue			Capital{A}						Revenue				Capital{A}
								£'000			£'000						£'000				£'000
	US Dollar							1,637			41,815						1,864				33,636
	Swiss Franc							505			6,638						446				10,179
	Euro							919			8,488						696				8,224
	Taiwan Dollar							447			12,730						403				9,443
								______			______						______				______
	Total							3,508			69,671						3,409				61,482
								______			______						______				______

	{A} Represents equity exposures to the relevant currencies.

	Foreign exchange contracts
	There were no forward currency contracts outstanding at the Statement of Financial Position date (2015 - one, detailed below).

																				Unrealised loss at
												Amount								31 December
							Settlement					JPY				Contracted				2015
	Date of contract						date					'000				rate				£'000
	27 November 2015						7 March 2016					1,600,000				184.22				351

	The fair value of forward foreign currency contracts is based on forward exchange rates at the Statement of Financial Position date.

	Price risk
	Other price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments. The Company's stated objective is to achieve a total return greater than its benchmark by investing predominantly in equities worldwide.

	Management of the risk
	It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The allocation of assets to international markets and the stock selection process, both act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are listed on various stock exchanges worldwide.

	Price risk sensitivity
	If market prices at the Statement of Financial Position date had been 10% higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 December 2016 would have increased/decreased by £161,889,000 (2015 - increase/decrease of £127,312,000) and capital reserves would have increased/decreased by the same amount.

(ii)	Liquidity risk
	This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities as they fall due in line with the maturity profile analysed below.

																			More
					Within			Within		Within				Within			Within		than
					1 year			1-2 years		2-3 years				3-4 years			4-5 years		5 years			Total
	At 31 December 2016				£'000			£'000		£'000				£'000			£'000		£'000			£'000
	Bank loans				60,000			60,000		15,000				50,000			-		-			185,000
	Debenture Stock{A}				-			-		-				-			-		150			150
	Interest cash flows on bank loans and Debenture Stock				3,016			2,245		1,364				629			6		199			7,459
	Cash flows on other creditors				2,603			-		-				-			-		-			2,603
					_____			______		_____				_____			_____		_____			______
					65,619			62,245		16,364				50,629			6		349			195,212
					_____			______		_____				_____			_____		_____			______

	{A} The Debenture Stock is perpetual and has therefore been disclosed as maturing after more than 5 years.
																			More
					Within			Within		Within				Within			Within		than
					1 year			1-2 years		2-3 years				3-4 years			4-5 years		5 years			Total
	At 31 December 2015				£'000			£'000		£'000				£'000			£'000		£'000			£'000
	Bank loans				24,024			60,000		60,000				-			50,000		-			194,024
	Debenture Stock{A}				-			-		-				-			-		150			150
	Interest cash flows on bank loans and Debenture Stock				4,140			3,458		2,025				1,255			629		205			11,712
	Cash flows on other creditors				2,589			-		-				-			-		-			2,589
					_____			______		_____				_____			_____		_____			______
					30,753			63,458		62,025				1,255			50,629		355			208,475
					_____			______		_____				_____			_____		_____			______

	{A} The Debenture Stock is perpetual and has therefore been disclosed as maturing after more than 5 years.

	Management of the risk
	Liquidity risk is not considered to be significant as the Company's assets comprise mainly readily realisable securities, which can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of loan and overdraft facilities (note 14).

(iii)	Credit risk
	This is failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.

	Management of the risk
	where the Manager makes an investment in a bond, corporate or otherwise, the credit ratings of the issuer are taken into account so as to manage the risk to the Company of default;
	- investments in quoted bonds are made across a variety of industry sectors and geographic markets so as to avoid concentrations of credit risk;
	- transactions involving derivatives are entered into only with investment banks, the credit rating of which is taken into account so as to minimise the risk to the Company of default;
	- investment transactions are carried out with a number of brokers, whose credit-standing is reviewed periodically by the Manager, and limits are set on the amount that may be due from any one broker;
	- the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the daily review of failed trade reports. In addition, both stock and cash reconciliations to the custodian's records are performed daily to ensure discrepancies are investigated in a timely manner. The Manager's Compliance department carries out periodic reviews of the custodian's operations and reports its finding to the Manager's Risk Management Committee;
	- cash is held only with reputable banks with acceptable credit quality. It is the Manager's policy to trade only with A- and above (Long Term rated) and A-1/P-1 (Short Term rated) counterparties.

	Credit risk exposure
	In summary, compared to the amounts in the Statement of Financial Position, the maximum exposure to credit risk at 31 December 2016 was as follows:

									2016									2015
									Balance				Maximum					Balance				Maximum
									Sheet				exposure					Sheet				exposure
									£'000				£'000					£'000				£'000
	Non-current assets
	Quoted preference shares and bonds at fair value through profit or loss								267,866				267,866					165,719				165,719

	Current assets
	Current taxation								1,318				1,318					1,966				1,966
	Deferred tax								-				-					891				891
	Forwards								-				-					351				351
	Other debtors								68				68					88				88
	Accrued income								11,456				11,456					6,717				6,717
	Cash and short term deposits								3,897				3,897					4,648				4,648
									______				______					______				______
									284,605				284,605					180,380				180,380
									______				______					______				______

	None of the Company's financial assets is secured by collateral or other credit enhancements.

	Fair values of financial assets and financial liabilities
	Forward currency contracts are measured at fair value. The fair value of borrowings has been calculated at £187,136,000 as at 31 December 2016 (2015 - £195,754,000) compared to an accounts value in the financial statements of £185,150,000 (2015 - £194,174,000) (note 13). The fair value of each loan is determined by aggregating the expected future cash flows for that loan discounted at a rate comprising the borrower's margin plus an average of market rates applicable to loans of a similar period of time and currency. The carrying value of all other assets and liabilities is an approximation of fair value.

19.	Fair value hierarchy
	FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The Company has early adopted Amendments to FRS 102 - Fair value hierarchy disclosures issued by the Financial Reporting Council in March 2016. This has not resulted in any reclassifications in levelling and the prior year comparative has been disclosed under the new hierarchy. The fair value hierarchy shall have the following classifications:

	Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.
	Level 2: inputs other than quoted prices included in Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.
	Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.

	The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows:

				Level 1	Level 2	Level 3	Total
	As at 31 December 2016		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	1,351,027	-	-	1,351,027
	Quoted preference shares		b)	-	7,191	-	7,191
	Quoted bonds		b)	-	260,675	-	260,675
				______	______	______	______
	Total			1,351,027	267,866	-	1,618,893
				______	______	______	______
	Net fair value			1,351,027	267,866	-	1,618,893
				______	______	______	______

				Level 1	Level 2	Level 3	Total
	As at 31 December 2015		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	1,107,402	-	-	1,107,402
	Quoted preference shares		b)	-	6,875	-	6,875
	Quoted bonds		b)	-	158,844	-	158,844
	Forward currency contracts		c)	-	351	-	351
				______	______	______	______
	Total			1,107,402	166,070	-	1,273,472
				______	______	______	______
	Net fair value			1,107,402	166,070	-	1,273,472
				______	______	______	______
	a)	Quoted equities
		The fair value of the Company's investments in quoted equities has been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges.
	b)	Quoted preference shares and bonds
		The fair value of the Company's investments in quoted preference shares and bonds has been determined by reference to their quoted bid prices at the reporting date. Investments categorised as Level 2 are not considered to trade in active markets.
	c)	Forward currency contracts
		The fair value of the Company's investment in forward currency contracts has been determined in relation to models using observable market inputs and hence are categorised in Fair Value Level 2.

20.	Capital management policies and procedures
	The investment objective of the Company is to achieve a total return greater than its benchmark by investing predominantly in equities worldwide.

	The capital of the Company consists of bank borrowings and equity, comprising issued capital, reserves and retained earnings. The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance.

	The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes:
	- the planned level of gearing which takes into account the Investment Manager's views on the market;
	- the level of equity shares in issue; and
	the extent to which revenue in excess of that which is required to be distributed should be retained.

	The Company's objectives, policies and processes for managing capital are unchanged from the preceding accounting period.

	Details of the Company's gearing facilities and financial covenants are detailed in note 14 of the financial statements.

21.	Related party transactions
	Directors' fees and interests
	Fees payable during the year to the Directors and their interests in shares of the Company are disclosed within the Directors' Remuneration Report in the Annual Report.

	Transactions with the Manager
	The Company has an agreement with Aberdeen Fund Managers Limited ("AFML") for the provision of investment management, secretarial, accounting and administration and promotional activity services.

	With effect from 1 January 2016, the Board and the Manager agreed a new basis for calculating the Company's management fees payable to AFML. The performance fee was discontinued and the annual management fee is charged on net assets (i.e. excluding borrowings for investment purposes) averaged over the six previous quarters ("Net Assets"), on a tiered basis. The annual management fee is charged at 0.575% of Net Assets up to £1,200 million, 0.5% of Net Assets between £1,200 million and £1,400 million, and 0.425% of Net Assets above £1,400 million. A fee of 1.5% per annum is chargeable on the value of any unlisted investments. The investment management fee is chargeable 30% against revenue and 70% against realised capital reserves. During the year £6,933,000 (2015 - £7,027,000) of investment management fees was payable to the Manager, with a balance of £1,766,000 (2015 - £1,703,000) being due at the year end.

	Included within the management fee arrangements is a secretarial fee of £100,000 per annum which is chargeable 100% to revenue. During the year £100,000 (2015 - £100,000) of secretarial fees was payable to the Manager, with a balance of £25,000 (2015 - £25,000) being payable to AFML at the year end.

	No fees are charged in the case of investments managed or advised by the Aberdeen Asset Management Group. The management agreement may be terminated by either party on the expiry of six month's written notice. On termination the Manager is entitled to receive fees which would otherwise have been due up to that date.

	The promotional activities fee is based on a current annual amount of £425,000 (2015 - £425,000), payable quarterly in arrears. During the year £425,000 (2015 - £485,000) of fees were payable to the Manager, with a balance of £106,000 (2015 - £104,000) being payable to AFML at the year end.

The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 31 December 2016 are an abridged version of the Company's full Annual Report and financial statements, which have been approved and audited with an unqualified report. The 2015 and 2016 statutory accounts received unqualified reports from the Company's auditors and did not include any reference to matters to which the auditor drew attention by way of emphasis without qualifying the reports, and did not contain a statement under s.498 of the Companies Act 2006. The financial information for 2015 is derived from the statutory accounts for 2015 which have been delivered to the Registrar of Companies. The 2016 financial statements will be filed with the Registrar of Companies in due course.

The Annual Report will be posted to shareholders in March 2017 and additional copies will be available from the registered office of the Company and on the Company's website, murray-intl.co.uk*

The Annual General Meeting will be held at 12.30 pm on 25 April 2017 at The Glasgow Royal Concert Hall, 2 Sauchiehall St, Glasgow G2 3NY.

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements. Investors may not get back the amount they originally invested.

*Neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

For Murray International Trust PLC

Aberdeen Asset Management PLC, Secretaries

10 March 2017

13 TWENTY LARGEST INVESTMENTS

As at 31 December 2016

					Valuation	Total	Valuation
					2016	assets{A}	2015
Company				Country	£'000	%	£'000
1 (3)	Taiwan Semiconductor Manufacturing
Taiwan Semiconductor Manufacturing Company is one of the largest integrated circuit manufacturers in the world. The company is involved in component design, wafer manufacturing, assembly, testing and mass production of integrated circuits which are used in the computer, communication and electronics industries.				Taiwan	72,720	4.5	51,397
2 (2)	Aeroporto del Sureste ADS
Grupo Aeroporto del Sureste operates airports in Mexico. The company holds long-term concessions to manage airports in leading tourist resorts such as Cancun and Cozumel, plus cities such as Oaxaca, Veracruz and Merida.				Mexico	69,869	4.3	57,264
3 (1)	British American Tobacco{B}
British American Tobacco is the holding company for a group of companies that manufacture, market and sell cigarettes and other tobacco products. The group sells over 300 brands in approximately 180 markets around the world.				UK & Malaysia	68,068	4.2	61,398
4 (5)	Philip Morris International
Spun out from the Altria Group in 2008, Philip Morris International is one of the world's leading global tobacco companies. It manufactures and sells leading recognisable brands such as Marlboro, Parliament and Virginia Slims.				USA	57,765	3.5	46,512
5 (4)	Unilever Indonesia
Unilever Indonesia, a majority owned subsidiary of Unilever NV, manufactures soaps, detergents, margarine, oil and cosmetics. The company also produces dairy based foods, ice cream and tea beverages.				Indonesia	55,937	3.4	47,220
6 (6)	Taiwan Mobile
Taiwan Mobile is the leading provider of cellular telecommunications services in Taiwan. Although predominantly a wireless network operator, the company also sells and leases cellular telephony equipment.				Taiwan	54,578	3.3	43,030
7 (13)	Daito Trust Construction
Daito Trust Construction operates building construction and property leasing businesses. The Company plans and constructs private apartments and commercial buildings mainly for land owners throughout Japan. Daito Trust also provides brokerage and maintenance services.				Japan	48,723	3.0	31,596
8 (12)	Verizon Communications
Verizon Communications is an integrated telecommunications company based in New York that provides wire line voice and data services, wireless services, internet services and published directory information. The Company also provides network services for the Federal Government.				USA	45,628	2.8	33,204
9 (15)	Total
Total is a fully integrated international energy company involved in exploration, production, refining, transportation and marketing of oil and natural gas. The company also operates a chemical division which produces polypropylene, polyethylene, polystyrene, rubber, paint, ink, adhesives and resins.				France	41,519	2.5	30,413
10 (16)			Telus
Telus is a telecommunications company providing a variety of communication products and services. The company provides voice, data, internet and wireless services to businesses and consumers throughout Canada.				Canada	41,191	2.5	29,852
Top ten investments					555,998	34.0
{A} The total assets less current liabilities as shown on the Balance Sheet with the addition of Prior Charges.
{B} Holding comprises UK and Malaysia securities split £49,450,000 (2015 - £40,350,000) and £18,618,000 (2015 - £21,048,000).

11 (19)			Sociedad Quimica Y Minera De Chile
Quimica Y Minera produces and markets specialist fertilizers including potassium nitrate, sodium nitrate and potassium sulfate for the agricultural industry. The company also produces industrial chemicals, iodine and lithium.				Chile	40,533	2.5	22,571
12 (11)			Singapore Telecommunications
Singapore Telecommunications is a communications company providing a diverse range of communications services including fixed-line telephony, mobile, data, internet, satellite and pay television. The company operates throughout the Asia Pacific region.				Singapore	38,742	2.4	33,349
13 (8)	Roche Holdings
Roche Holdings develops and manufactures pharmaceutical and diagnostic products. The company produces prescription drugs in the areas of cardiovascular, respiratory diseases, dermatology, metabolic disorders, oncology and organ transplantation.				Switzerland	37,043	2.3	37,468
14 (-)	Banco Bradesco{C}
Banco Bradesco is one of Brazil's leading banks. In addition to attracting deposits and making loans, the bank offers a full range of commercial banking services, including personal credit, mortgages, lease financing, mutual funds, securities brokerage and internet banking services. Bradesco also offers credit cards, insurance and pension funds.				Brazil	36,044	2.2	19,208
15 (-)	Vale do Rio Doce{D}
Vale is one of the world's largest, fully-integrated, natural resources companies. Based in Brazil, the company produces iron-ore, manganese, alloys, gold, nickel, copper, aluminium, potash and numerous other minerals. In addition to its mining assets, Vale also owns and operates railways and maritime terminals.				Brazil & USA	33,429	2.0	15,365
16 (-)	Royal Dutch Shell
Royal Dutch Shell, through numerous international subsidiaries and global partnerships, explores for and produces oil, gas and petroleum products. In addition to producing fuels, chemicals and lubricants, the company owns and operates petrol filling stations worldwide.				UK	32,014	2.0	20,985
17 (-)	CME Group
Based in Chicago, Illinois, CME Group operates a derivatives exchange that trades futures contracts and options, interest rates, stock indexes, foreign exchange and commodities. The exchange brings together buyers and sellers of derivatives products on its trading floor, electronic trading platform and through privately negotiated transactions.				USA	29,872	1.8	19,664
18 (10)		Pepsico
Pepsico operates worldwide beverage, snack and food businesses. The Company manufactures or uses contract manufacturers, markets and sells a variety of grain-based snacks, carbonated and non-carbonated beverages and various food products. Pepsico is a global company with operations in numerous countries throughout the world.				USA	29,648	1.8	33,883
19 (17)			Johnson & Johnson
Johnson & Johnson manufactures health-care products and provides related services for consumer, pharmaceutical and medical devices and diagnostic markets, The company has numerous leading branded products, particularly in skin care and hair care, and has extensive distribution agreements to sell its products worldwide.				USA	27,979	1.7	27,869
20 (-)	Tenaris ADR
Tenaris manufactures, markets and distributes welded and seamless pipe. The company produces casing, tubing, pipeline and mechanical tubes for the oil and gas and energy industries and for mechanical applications and distributes its products worldwide.				Mexico	27,538	1.7	17,747
Top twenty investments					888,840	54.4

{A} The total assets less current liabilities as shown on the Balance Sheet with the addition of Prior Charges.
{C} Holding comprises equity and fixed income securities split £24,192,000 (2015 - £10,161,000) and £11,852,000 (2015 - £9,047,000).
{D} Holding comprises equity and fixed income securities split £15,892,000 (2015 - £4,931,000) and £17,537,000 (2015 - £10,434,000).
The value of the 20 largest investments represents 54.4% (2015 - 57.5%) of total assets. The figures in brackets denote the position at the previous year end. (-) denotes not previously in 20 largest investments.

Portfolio of Investments - Other Investments

		Valuation	Total	Valuation
		2016	assets{A}	2015
Company	Country	£'000	%	£'000
Public Bank	Malaysia	27,393	1.7	22,535
HSBC	UK	26,933	1.6	21,984
Kimberly Clark de Mexico	Mexico	24,936	1.5	26,853
Fomento Economico Mexicano	Mexico	24,667	1.5	34,697
Telefonica Brasil	Brazil	24,562	1.5	13,892
Standard Chartered	UK	22,183	1.4	18,844
Swire Pacific 'B'	Hong Kong	22,112	1.4	12,449
Petroleos De Venezuela 5.25% 12/04/17	Venezuela	21,790	1.3	10,079
BHP Billiton	Australia	20,904	1.3	12,160
Siam Commercial Bank	Thailand	20,611	1.3	-
Top thirty investments		1,124,931	68.9
Republic of South Africa 7% 28/02/31	South Africa	19,342	1.2	13,206
Inmarsat	UK	18,788	1.1	-
Novartis	Switzerland	17,701	1.1	17,649
MTR	Hong Kong	17,685	1.1	-
Auckland International Airport	New Zealand	17,550	1.1	-
Japan Tobacco	Japan	17,319	1.1	16,391
Potash Corporation of Saskatchewan	Canada	16,711	1.0	13,185
Atlas Copco	Sweden	16,670	1.0	11,812
Coca-Cola Amatil	Australia	16,584	1.0	12,922
MTN	South Africa	16,422	1.0	12,801
Top forty investments		1,299,703	79.6
Casino	France	15,566	1.0	17,646
Petroleos Mexicanos 6.75% 21/09/47	Mexico	15,292	0.9	-
Republic of Indonesia 7.0% 15/05/22	Indonesia	15,230	0.9	11,614
Republic of Indonesia 6.125% 15/05/28	Indonesia	15,229	0.9	11,593
Weir Group	UK	15,120	0.9	8,000
Oversea-Chinese Bank	Singapore	14,990	0.9	12,309
Bayer	Germany	14,760	0.9	-
Bharti Airtel International 5.125% 11/03/23	India	14,339	0.9	11,940
Federal Republic of Brazil 10% 01/01/23	Brazil	14,018	0.9	-
Vodafone Group	UK	13,990	0.9	15,470
Top fifty investments		1,448,237	88.7
Engie	France	13,036	0.8	15,156
Republic of Indonesia 8.375% 15/03/34	Indonesia	12,080	0.7	9,218
Nestlé	Switzerland	11,634	0.7	15,159
Tesco Lotus Retail Growth	Thailand	11,526	0.7	-
Republic of Dominican 6.85% 27/01/45	Dominican Republic	11,487	0.7	-
Republic of Uruguay 5.1% 18/06/50	Uruguay	11,426	0.7	-
Wilson & Sons	Brazil	11,223	0.7	8,489
Alfa 6.875% 25/03/44	Mexico	11,018	0.7	-
America Movil Sab De 6.45% 05/12/22	Mexico	10,712	0.7	-
Federal Republic of Brazil 10% 01/01/18	Brazil	9,815	0.6	6,184
Top sixty investments		1,562,194	95.7
Federal Republic of Brazil 10% 01/01/21	Brazil	9,562	0.6	-
Federal Republic of Brazil 10% 01/01/25	Brazil	9,226	0.5	-
Petroleos Mexicanos 5.5% 27/06/44	Mexico	8,082	0.5	15,313
Power Finance Corp 8.2% 10/03/25	India	6,296	0.4	-
Housing Dev Finance Corp 8.43% 04/03/25	India	6,219	0.4	-
Republic of Indonesia 10% 15/02/28	Indonesia	5,086	0.3	3,947
Republic of Indonesia 9.5% 15/07/23	Indonesia	5,037	0.3	3,950
General Accident 7.875% Cum Irred Pref	UK	3,626	0.2	3,472
Santander 10.375% Non Cum Pref	UK	3,565	0.2	3,403
Total investments		1,618,893	99.1
Net current assets{A}		14,136	0.9
Total assets{B}		1,633,029	100.0
{A} Excluding bank loans.
{B} The total assets less current liabilities as shown on the Balance Sheet with the addition of Prior Charges

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR URUBRBAAOAAR

Companies

Murray International Trust (MYI)

Thursday, 23rd May 2024

COMPANIES COVERED:

HL. QQ. AJB

Another day and another round of takeover talk with Hargreaves Lansdown being eyed by private equity suitors. AJ Bell also advances on upbeat earnings news whilst QinetiQ upgrades its profit guidance, too.

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